[zhte415]

US 30 year mortgage, fixed rate as they are, are risk subsidised by Fannie Mae and Freddie Mac. It's a regulatory subsidy of the mortgage and ex-mortgage home owning class.

That 'problem' is caused by regulation, structural regulation, not day-to-day regulatory enforcement or change. So where does that risk 'go'? Where do you suggest? What can regulators do to un-risk the risk that's been un-risked/passed on from those that take out mortgages?

[roenxi]

I'm not sure I follow the question, but presumably the people borrowing the money aren't bearing it and the people lending the money probably aren't stupid enough to lend money for 30 years at fixed interest rates. So by elimination, the the people holding the bag are probably the taxpayers.

But I don't know the details of how the market works. Wouldn't surprise me if there are other quirks at play.