> mortgages before the 1934 reforms weren't quite what we'd recognize as mortgages. They generally didn't cover the full value of the house.
Mortgages now generally don't cover the full value either, though its sometimes possible to get 100% coverage through multiple mortgages of different types; in the 1920s bank mortgages tended to be short term (5 years) and not amortized (that is interest only, with balloon payment due at the end, and limited to about 50% of value; B&L mortgages tended to be fully amortized and up to around 11-12 years, typically limited to 30% when taken as a second mortgage. 80% financing was done by taking one mortgage of each type, often with the expectation of refinancing at the expiration of the bank mortgage.
The popularity of mortgages didn't cause a crash, the general financial crash at the end of the 1920s and the Great Depression caused credit to dry up (and lots of people with mortgages that needed to refinance due to balloon payments, even if they were managing to pay the existing mortgage, to be less credit-worthy even if credit hadn't dried up), which resulted in a mortgage crisis. (While, unlike the 2000s mortgage crisis, the triggering broader market problem wasn't tied to mortgages or mortgaged-backed securities, there is a very close parallel in the two crises in how widespread dependence on short-term ability to refinance caused a foreclosure crisis when both mortgage credit tightened and a broader economic downturn impacted creditworthiness, so that lots of people whose ability to remain in their homes was based on an expected near-term refinance could not secure such refinancing.)
> the 1934 act created 15 year mortgages
The 1934 created the FHA and its mission of guaranteeing qualified 15-year or longer mortgages; 39-year mortgages were actually introduced then (based on an expected 30-year prime working age range), but became most widespread in the post-war boom; the GI Bill and VA loans played a role in this
Mortgages now generally don't cover the full value either, though its sometimes possible to get 100% coverage through multiple mortgages of different types; in the 1920s bank mortgages tended to be short term (5 years) and not amortized (that is interest only, with balloon payment due at the end, and limited to about 50% of value; B&L mortgages tended to be fully amortized and up to around 11-12 years, typically limited to 30% when taken as a second mortgage. 80% financing was done by taking one mortgage of each type, often with the expectation of refinancing at the expiration of the bank mortgage.
The popularity of mortgages didn't cause a crash, the general financial crash at the end of the 1920s and the Great Depression caused credit to dry up (and lots of people with mortgages that needed to refinance due to balloon payments, even if they were managing to pay the existing mortgage, to be less credit-worthy even if credit hadn't dried up), which resulted in a mortgage crisis. (While, unlike the 2000s mortgage crisis, the triggering broader market problem wasn't tied to mortgages or mortgaged-backed securities, there is a very close parallel in the two crises in how widespread dependence on short-term ability to refinance caused a foreclosure crisis when both mortgage credit tightened and a broader economic downturn impacted creditworthiness, so that lots of people whose ability to remain in their homes was based on an expected near-term refinance could not secure such refinancing.)
> the 1934 act created 15 year mortgages
The 1934 created the FHA and its mission of guaranteeing qualified 15-year or longer mortgages; 39-year mortgages were actually introduced then (based on an expected 30-year prime working age range), but became most widespread in the post-war boom; the GI Bill and VA loans played a role in this