The federal government has (1) encouraged the development of the savings and loan industry, (2) virtually forced the S&L industry to make long-term, fixed-interest-rate mortgages, and (3) forced S&Ls to obtain most of their capital as deposits that are withdrawable on demand. Would the S&Ls be better off if rates are expected to increase or to decrease in the future? Would the S&L industry be better off if the individual institutions sold their mortgages to federal agencies and then collected servicing fees or if the institutions held the mortgages that they originated? The federal government has (1) encouraged the development of the savings and loan industry, (2) virtually forced the S&L industry to make long-term, fixed-interest-rate mortgages, and (3) forced S&Ls to obtain most of their capital as deposits that are withdrawable on demand. Would the S&Ls be better off if rates are expected to increase or to decrease in the future? Would the S&L industry be better off if the individual institutions sold their mortgages to federal agencies and then collected servicing fees or if the institutions held the mortgages that they originated