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The paper explains how these shifts affected financial industries and homebuyers, then outlines likely developments expected to follow. It integrates institutional and market mechanisms into a forward-looking assessment of mortgage credit dynamics.",{"@graph":69,"@context":123},[70,84,106],{"@type":71,"itemListElement":72},"BreadcrumbList",[73,77,79,82],{"item":74,"name":75,"@type":76,"position":8},"https://docshare.wps.com","Home","ListItem",{"item":78,"name":9,"@type":76,"position":14},"https://docshare.wps.com/document/",{"item":80,"name":40,"@type":76,"position":81},"https://docshare.wps.com/document/research-report/",3,{"item":83,"name":65,"@type":76,"position":19},"https://docshare.wps.com/document/the-market-for-home-mortgage-credit-recent-changes-and-future-prospects/203340/",{"url":83,"name":65,"@type":85,"image":86,"author":91,"headline":65,"publisher":94,"fileFormat":97,"inLanguage":63,"description":67,"dateModified":98,"datePublished":99,"encodingFormat":97,"isAccessibleForFree":100,"interactionStatistic":101},"DigitalDocument",{"url":87,"@type":88,"width":89,"height":90},"https://docshare.wps.com/thumbnails/the-market-for-home-mortgage-credit-recent-changes-and-future-prospects/203340.png","ImageObject",300,407,{"name":92,"@type":93},"Patrick","Person",{"url":74,"name":95,"@type":96},"DocShare","Organization","application/pdf","2026-10-16","2026-09-04",true,{"@type":102,"interactionType":103,"userInteractionCount":105},"InteractionCounter",{"@type":104},"ViewAction",13,{"@type":107,"mainEntity":108},"FAQPage",[109,115,119],{"name":110,"@type":111,"acceptedAnswer":112},"What three major changes occurred in the home mortgage credit market during the 1980s?","Question",{"text":113,"@type":114},"The paper highlights securitization of fixed-rate mortgages, development of a national primary market for adjustable-rate mortgages, and the decline of the savings and loan industry.","Answer",{"name":116,"@type":111,"acceptedAnswer":117},"How did mortgage securitization influence fixed-rate mortgage integration and rates?",{"text":118,"@type":114},"Integration with capital markets increased through programs and the development of pass-through securities, making new-issue FRM coupons adjust quickly to broader market rates.",{"name":120,"@type":111,"acceptedAnswer":121},"How did adjustable-rate mortgages change household access to larger loans?",{"text":122,"@type":114},"The wide availability of ARMs reduced cross-subsidies from less mobile to more mobile households, increasing the ability of many households to qualify for larger loans.","https://schema.org",{"og:url":83,"og:type":125,"og:title":65,"og:site_name":95,"og:description":67},"article",{"robots":127,"canonical":83},"index,follow",{"doc_id":129,"site_id":62},203340,1788559904,{"code":4,"msg":5,"data":132},{"doc_id":129,"user_id":133,"nickname":92,"user_avatar":134,"doc_module":4,"category_id":39,"category_name":40,"doc_title":65,"doc_description":67,"doc_content":135,"file_id":136,"file_url":137,"file_type":138,"file_size":139,"view_count":105,"is_deleted":4,"is_public":8,"is_downloadable":8,"audit_status":8,"page_count":140,"language":141,"language_code":63,"site_id":62,"html_lang":63,"table_of_contents":142,"faqs":143,"seo_title":144,"seo_description":67,"update_tm":130,"read_time":145,"preview_page_count":4},549758146520,"https://ap-avatar.wpscdn.com/avatar/80002397d8c0411e94?_k=1775819394049821470","NBER WORKING PAPERS SERIES  \nTHE MARKET FOR HOME MORTGAGECREDIT:RECENT CHANGESAND FUTURE PROSPECTS  \nPatric H.Hendershott  \nWorking Paper No.3548  \nNATIONAL BUREAU OF ECONOMIC RESEARCH1050 Massachusetts AvenueCambridge,MA 02138December 1990  \nPrepared for the 1990 Economic Policy Conference of the FederalReserve Bank of St.Louis,I thank jack Goodman,Robert Vanorder,and Kevin Villani for comments on an earlier draft.Thispaper is part of NBER's research program in Financial Markets andMonetary Economics.Any opinions expressed are those of theauthor and not those of the Nationai Bureau of Economic Research.  \nNBER Working Paper \\#3548December 1990  \n# THE MARKET FOR HOME MORTGAGE CREDIT:RECENT CHANGES AND FUTURE PROSPECTS\n\n## ABSTRACT\n\nThree major changes occurred during the 1980s in the marketfor home mortgage credit;the securitization of fixed-ratemortgages,the development of a national primary market foradjustable-rate mortgages,and the decimation of the saving andloan industry.  These changes and their impacts on variousfinancial industries and homebuyers are the subjects of thispaper.  I also briefly speculate about likely future changes inthis market.  \nPatric H.HendershottDepartment of FinanceHagerty Hall1775 College RoadColumbus,OH 43210  \nThe Market for Home Mortgage Credit;Recent changes and Future Prospects  \nPatric H.Hendershott  \nThree niajor changes occurred during the 1980s in the market for homemortgage credit:the securitization of fixed-rate mortgages,the developmentof a national primary market for adjustable-rate mortgages,and the decimationof the saving and loan industry.These changes and their impacts on variousfinancial industries and homebuyers are the subjects of this paper.I brieflysumrnarize the three major changes before presenting a detailed analysis.  \nThe PHA/VA fixed-rate mortgage(FRM)market was integrated with theCap+tal market gradually throughout the 1970s via increased usage of the GinnieMae pass-through program,and the conventional FRM market was integrated in thefirst half of the 1980s with the development of active markets for the mortgagepass-through securities of Freddie Mac and Fannie Mae.Integration wasstimulated in the 1980s by the deregulation of deposit rate ceilings and theerosion of thrift tax subsidies,two developanents that switched thrifts from1ow cost funders of mortgages to high cost funders.As a result,coupons onnew-issue FRMs now swift1y adjust to changes in other capital market rates,andnortgage funds are readily available at all times and places at going marketrates.  \nNationwide authority to originate adjustable-rate mortgages(ARMs)wasnot given to federally-chartered thrifts until 1979,and ARMs with loose peradjustment period and life-of-loan rate caps were not permitted until 1981.Inresponse to this authorization,ARMs accounted for two-fifths of the totalconventional loan volune originated by all lenders over the 1984-89 period,andby 1989,half of the thrift home loan portfolio was in ARMs,The widespread  \nexistence of ARMs reduced the previous cross-subsidy from more mobile to lessmobile households and increased the ability of many households to qualify forlarger loans.  \nThe large losses of the savings and loan(S&L)industry in the 1980sstemmed first from badly mismatched asset and liability portfolios in the late1970s and early 1980s,when interest rates skyrocketed,and then from rapid S&Lgrowth and accelerated investment in nontraditional,and expost nonprofitable,real estate loans in 1983 and 1984.  In the 1985-88 period,the industry grewat a relatively slow rate,and since passage of FIRREA,the industry has beenin freefall.  Between the end of 1984 and the end of 1990,the s&L share ofhome mortgages outstanding has declined from 43 percent(also the average sharein the second half of the 1970s)to 25 percent.  AS I will discuss,the S&Lproblems in the early 1980s substantially raised conventional FRM rates,butthe recent decline in the SEL home mortgage share has not raised FRM","cbCaidh8Ely2echH","https://ap.wps.com/l/cbCaidh8Ely2echH","pdf",460551,38,"English","# Abstract\n## The Development of Mortgage Pass-Through Securities\n## Integration and Impacts on Mortgage Rates\n## Growth of the ARM Market and Decline of S&L\n## Future Prospects and Summary","[{\"question\":\"What three major changes occurred in the home mortgage credit market during the 1980s?\",\"answer\":\"The paper highlights securitization of fixed-rate mortgages, development of a national primary market for adjustable-rate mortgages, and the decline of the savings and loan industry.\"},{\"question\":\"How did mortgage securitization influence fixed-rate mortgage integration and rates?\",\"answer\":\"Integration with capital markets increased through programs and the development of pass-through securities, making new-issue FRM coupons adjust quickly to broader market rates.\"},{\"question\":\"How did adjustable-rate mortgages change household access to larger loans?\",\"answer\":\"The wide availability of ARMs reduced cross-subsidies from less mobile to more mobile households, increasing the ability of many households to qualify for larger loans.\"}]","THE MARKET FOR HOME MORTGAGE CREDIT - RECENT CHANGES AND FUTURE PROSPECTS | PDF",96]