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Who holds mortgages?


When you take out a mortgage, someone (usually some financial institution) “holds” that mortgage. That is, they’re the lender and you must pay them back. Nowadays it’s not always obvious who holds your mortgage, as it may have been sold to someone else, much like a Treasury bond can be sold. The Board of Governors, though, has been tracking this information since WWII. The graph above reveals that the composition of mortgage holders has changed over time. Initially, it was mostly banks—but also some individuals and, to a small degree, also the government. Gradually, mortgage pools and trusts have taken over—that is, companies that specialize in the pooling of similar mortgages that can then be sold as securities. Thus, the so-called securitization of mortgages. These are the institutions that some believe were at the center of the troubles that led to the previous recession and financial crisis. Indeed, the graph shows that the government took over a large portion of their portfolios in 2010 in an attempt to stabilize the mortgage and real estate markets.

How this graph was created: Search for mortgage debt outstanding release in FRED, check the series you want,* and click on “Add to Graph.” From the “Edit Graph” menu, open the “Format” panel, choose graph type “Area” with stacking set to “Percent.” Have the graph start in 1952 to avoid those messy first years.

* Pay careful attention to the series you choose; many of them have similar titles, and some are subsets of larger series. Refer to the series IDs noted below if you want to use the specific series shown here.

Suggested by Christian Zimmermann.

View on FRED, series used in this post: MDOTHFRA, MDOTHIOH, MDOTHMFI, MDOTHMPT


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