[quote=spdrun]Or banks will quietly make existing loans assumable, as was done in the 1980s.[/quote]
spdrun, lenders cannot do anything other than what is already written in the original note, nor can their successors (other lenders down the line who purchased these notes). Virtually zero conventional loans made since about 2002 had any assumability provisions in them.
In the era you are referring to, mortgage loans already had assumability provisions and instructions written into them. Virtually all mortgage loans made in the last 14-15 years have alienation clauses built into them (due on sale/refinance clauses).
If interest rates rose, lenders could begin to OFFER assumable loans again (to keep within their portfolios), but those would be new (purchase-money or refinance) loans. However, I don’t see this taking place unless fixed mortgage rates soar past 10%.
And I don’t see mortgages with assumability provisions offered except to the most worthy borrowers. It is far easier and less headache for a Big Bank, mortgage bank or servicer to (immediately or within a year or two of origination) sell a mortgage they originated than to keep it in their portfolio.
