Bethany McLean has a good background story on 30 year mortgage here.
“For a homeowner, a mortgage with a 30-year fixed rate (especially one that he can pay off early without a penalty) is a wonderful thing. For lenders and investors, however, it is a financial Frankenstein’s monster, an unnatural product filled with the potential for losses. Absorbing some of the risk of those losses is a large part of what the government does in the housing market.”
It’s been a great subsidy for homeowners and a real path to wealth, which is why Greenspan was pushing for increased home ownership for all. Of course he didn’t bother to study or counter the massive risks.
