The complex web of regulation surrounding home-lending put these options off limits for most Americans, or at least those buying without the help of the federal government. The Federal Housing Finance Agency, on behalf of Fannie Mae and Freddie Mac, told The New York Times and American Banker earlier this year that portable mortgage options “are not under consideration” for the general public. The Times concluded, “Right now by law there’s no way to detach that loan from the property that serves as its collateral and reattach it to a new property.”
Rapid changes in mortgage rates cause homeowners to stay put, and the housing and labor markets suffer the consequences. People are less likely to move, either to bigger homes or to better jobs, stagnating economic mobility. While other countries have found creative, free-market solutions to reduce the impact of mortgage lock-in, America’s complex regulatory environment keeps these options out of reach for most buyers.
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