The mortgage industry has seen its fair share of major changes since the Great Inflation that occurred back in the 1970s. In fact, that era essentially shaped the way our current mortgage system works. Though some of these changes have been a bit difficult, others have benefitted those who buy and sell homes or properties tremendously.

Before the Great Inflation

Before the Great Inflation that took hold in 1976, more than half of all of the mortgages in the country were originated by savings and loans. Mutual banks, commercial banks, and actual mortgage companies combined were responsible for the rest of the origination. There was no securitization, and the Federal Housing Administration only barely existed – it made for very little of the market. In these days, the success of the savings and loans depended heavily on interest rates. As long as they were stable, they could borrow deposits and lend in the form of mortgages, creating a solid business with steady income. read more