- A History of Mortgage Banking in the West: Financing America’s Dreams by E. Michael Rosser and Diane M. Sanders
By E. Michael Rosser and Diane M. Sanders. Boulder: University Press of Colorado, 2017. ix + 372 pp. Illustrations, bibliography, suggested readings, index. $35.00 cloth.
A book titled A History of Mortgage Banking in the West sounds pretty easy to categorize and market: label it under economic history and call it good. However, this collaborative book by Michael Rosser and Diane Sanders is really a combination of multiple genres. Equal parts economic history, memoir, and geographic history, the book covers the creation and evolution of the mortgage banking industry through the eyes of Rosser, a third-generation mortgage-lending professional whose family ties stretch from Kansas to Colorado. It is here that the industry gets its start in the agricultural communities that blanketed the western Great Plains following the Civil War. The book’s narrative [End Page 219] weaves through the places, companies, and developments that Rosser knows best.
Rosser is a deeply experienced insider who methodically explains the evolution of the mortgage industry and, with his coauthor, places it in a historical context. Much like the banking industry itself, Rosser views the history of the West from Euro-American settlement to the 2007 mortgage crisis through the lens of capital. While providing personal examples of home buying and business development, the narrative’s real thrust is an impersonal, clinical calculation of large capital moving across and shaping the landscape.
The authors trace the beginning of the modern mortgage-lending industry to the financial needs of farmers that moved into the Plains states following the Civil War. The 1864 National Banking Act severely limited national banks’ investments in real estate, which translated into farmers paying higher land and home finance rates to regional and specialty banks willing to lend for real estate. Rectifying this disparity became a platform of the People’s Party in the 1890s and worked itself into later federal policy when the Federal Farm Loan Act of 1916 created the first government-sponsored enterprise—a privately owned entity backed by the federal government that had a social purpose, in this case “to expand the availability of credit and favorable conditions to underserved groups” (152). This 1916 act produced the first in a series of government-sponsored enterprises that include today’s familiar home mortgage giants, Fannie Mae and Freddie Mac.
The book ends with a postmortem of the 2007 mortgage crisis and a look toward the future. Rosser breaks with consensus on the crashes’ causes by casting equal blame on Freddie Mac and Fannie Mae, whom he believes acted irresponsibly by focusing on increasing shareholder profits and senior management compensation and ended up overextended and in need of a bailout from the federal government.
Readers of this journal will be most interested in the book’s ability to connect the Great Plains’ centrality to the mortgage industry and its impact on the nation’s transition from subsistence to commercial agriculture.
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