Joyful Alternative

Why Did the Mortgage Market Go Out of Control?

I can move things back further than Bendra did. The very conservative insurance company I worked for in 1978 was buying blocks of home mortgages from local banks thousands of miles away for geographic diversification. The local banks continued servicing the loans for a fee.

That's a far cry from slicing and dicing mortgages and selling tranches of the chopped mystery meat, but it wasn't Norman Rockwell days either.

Although at the same time I was paying my own mortgage to a mortgage association with no physical location that met monthly to review proposed loans and accept payments on existing loans. Mortgagees were required to appear monthly in person, and most of them paid cash.