uncompetitive 5.75% interest rates on savings accounts and consequently losing savers' money to money market funds. Unlike the traditional localized, inefficient mortgage market where there might be a shortage or surplus of funds at any one time, MBSs were national in scope and regionally diversified. Mortgage backed securities helped move interest rate out of the banking sector and facilitated greater specialization among financial institutions. However, mortgage-backed securities may have "led inexorably to the rise of the subprime industry" and "created hidden, systemic risks". They also "undid the connection between borrowers and lenders". Historically, "less than 2% of people lost their homes to foreclosure", but with securitization, "once a lender sold a mortgage, it no longer had a stake in whether the borrower could make his or her payments." History Among the early examples of mortgage-backed securities in the United States were the slave mortgage bonds of the early 18th century and the farm railroad mortgage bonds of the mid-19th century which may have contributed to the panic of 1857. There was also an extensive commercial MBS market in the 1920s. US government In June 1933, the Glass–Steagall Act was signed into law by President Franklin D. Roosevelt. This legislative initiative separated commercial banking from investment banking, providing safeguards against possible corruption with many types of investment securities (like the MBS). Even though the fixed-rate mortgage did not yet exist at this time, the law deemed it illegal for a banking institution to both sponsor debts and design investment vehicles or market-making tools as the selfsame entity. In other words, the Mortgage-Backed Security could probably not have existed at this time (without a little tweaking of the laws). As part of the New Deal following the Great Depression, the US federal government created the Federal Housing Administration (FHA) with the National Housing Act of 1934 to assist in the construction, acquisition, and rehabilitation of residential properties. The FHA helped develop and standardize the fixed-rate mortgage as an alternative to the balloon payment mortgage by insuring them, and helped the mortgage design garner usage. In 1938, the government also created the government-sponsored corporation Fannie Mae to create a liquid secondary market in these mortgages and thereby free up the loan originators to originate more loans, primarily by buying FHA-insured mortgages. As part of the Housing and Urban Development Act of 1968, Fannie Mae was split into the current Fannie Mae and Ginnie