Huffpost Business

Former Fannie Mae Official: 30 Year Mortgages May Be Root Of New Bubble

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The 30-year fixed-rate mortgage, the most common way U.S. buyers finance a home purchase, isn’t the ideal instrument its supporters claim it to be.

First, its dominance requires permanent government subsidies. Second, it amortizes slowly, exposing homebuyers to years of unnecessary default risk. Third, it was responsible for two taxpayer bailouts in the last 20 years.

Most important, these mortgages may be behind a new bubble.

Read the whole story at Bloomberg