Secret #45 – The U.S. Mortgage Industry is Largely Nationalized
According to this graph, 87% of mortgages are purchased by government entities that resell them as mortgage-backed securities, and the Fed has bought about 1/3 of all existing mortgage-backed securities those government entities created.
The system is supposed to encourage the private sector to make mortgages with the idea that more mortgage debt will lead to higher home ownership.
It didn’t work. We got very high mortgage debt which may be good for mortgage and real estate businesses but home ownership isn’t really any higher than it was 50 years ago.
Shouldn’t a nationalized mortgage system be designed to maximize free-and-clear home ownership, not mortgage debt?
A discussion of the U.S. nationalized mortgage system on YouTube, here.