Alternative Mortgage Transaction Parity Act - AMTPA
A law passed by the U.S. Congress in 1982 that effectively opened up the mortgage market. Prior to the passage of the Alternative Mortgage Transaction Parity Act, many states had laws on the books restricting the type of mortgages that lenders could offer other than the vanilla fixed-rate mortgage that your grandpa always advised you to stick with, advice that always seemed to come in the middle of your birthday parties ("But Pop Pop...I'm only 6. I don't have a morch-gage.")
The AMTPA preempted those state laws and made more exotic mortgages available nationwide. This included things like adjustable-rate mortgages (where the interest rate you pay fluctuates according to changes in overall interest rates) and balloon payment mortgages (where monthly payments are kept low by tacking a single large payment sometime down the road).
The law gave consumers and lenders more flexibility, possibly leading to more access to home ownership. However, later critics (we're talking a couple decades later at this point) would blame these more unconventional mortgage structures for fueling the housing bubble of the mid 2000s, which ultimately led to financial crisis of 2007-2008.
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Finance: What is a Mortgage?345 Views
Finance allah shmoop shmoop What is a mortgage Well people
a mortgage is just dead it's alone but one with
special tax treatment For most people simply put Any interest
you pay on a mortgage to buy a home is
tax deductible Morty morton's inputs down a hundred thousand bucks
to buy a home that costs four hundred big ones
his mortgages three hundred grand at five percent interest per
year So that's fifteen thousand dollars a year he pays
to rent the money from the bank which he uses
to buy his dream home with the loop de loop
waterslide Morty earns one hundred grand a year and pays
tax on his last fifteen thousand of earnings soas faras
The irs is concerned since morty can deduct his fifteen
thousand dollars in interest against his earnings he does not
in fact earn taxable wages of one hundred grand annually
Instead he earns taxable wages of eighty five thousand dollars
a year Essentially with government is doing is sharing in
some of the cost of renting the money Taub i'm
ortiz home well why would the u s government be
so charitable Well because home ownership has been integral part
of the american dream since the u s of a
i po'ed in seventeen seventy six easy access to mortgages
and then home buying can be a hugely beneficial asset
In the vast majority of cases homes create family stability
a store of wealth and tax dollars for local schools
in the form of real estate taxes So don't feel
bad about splurging on that water slide there Morty Just 00:01:42.93 --> [endTime] remember you're doing it for the kids Hello
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