NPR logo

The Friday Podcast: The Frankenstein Mortgage

  • Download
  • <iframe src="https://www.npr.org/player/embed/132940442/132948551" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
The Friday Podcast: The Frankenstein Mortgage

Government

The Friday Podcast: The Frankenstein Mortgage

The Friday Podcast: The Frankenstein Mortgage

  • Download
  • <iframe src="https://www.npr.org/player/embed/132940442/132948551" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
Damian Dovarganes/AP
Fannie Mae
Damian Dovarganes/AP

The 30-year, fixed-rate mortgage — the bedrock of American home ownership — is a weird loan.

In an ordinary market, you'd have to pay a really high interest rate to get a 30-year fixed, if you could get it at all. It was government intervention, through Fannie Mae, that turned the loan into America's plain-vanilla mortgage.

On today's Planet Money, Bethany McLean and Joe Nocera (authors of All the Devils Are Here, a book on the financial crisis) walk us through the 30-year-fixed and the history of Fannie and Freddie. And they talk about where we go from here.

For more:Here's an NYT op-ed where McLean compares a 30-year fixed-rate loan to a "financial Frankenstein's monster." And here's a look at 3 possible scenarios for the U.S. mortgage market.

Subscribe to the podcast. Music: Kings of Leon's "Radioactive." Find us: Twitter/ Facebook.