That&#x27;s very recent, though.  We had thirty year mortgages long before the government started holding most of the paper.<p>Banks have been selling loans for ages - when I bought my first house in the &#x27;90s the bank which originated the loan sold it to a life insurance company four days after escrow closed.  After a few years that insurance company sold it to someone else.<p>Life insurance is a good fit for mortgages.  Insurance companies need a safe investment to pay out when people die, and usually the payout isn&#x27;t inflation adjusted.<p>Besides, if you have to invest money for the long term but can&#x27;t (by statute or temperament) handle much risk, what are you going to invest in?  Twenty year T-Bills are at 2.30%.