Government policies can influence mortgage interest rates through various mechanisms:

1. **Monetary Policy:** Central banks, such as the Federal Reserve in the United States, set monetary policy, including the target for short-term interest rates. Changes in the federal funds rate, which is the interest rate at which banks lend to each other overnight, can indirectly impact mortgage rates. When the central bank lowers interest rates, mortgage rates tend to decrease, and vice versa.

2. **Quantitative Easing:** During times of economic uncertainty or recession, governments may implement quantitative easing programs, where central banks purchase government securities and other financial assets. This influx of liquidity into the financial system can put downward pressure on long-term interest rates, including mortgage rates.

3. **Government-Sponsored Enterprises (GSEs):** Government-sponsored enterprises (GSEs) such as Fannie Mae and Freddie Mac play a significant role in the mortgage market. Their activities, including the purchase and securitization of mortgages, can influence mortgage rates. Government policies related to GSEs can impact their operations and, consequently, mortgage rates.

4. **Regulatory Policies:** Government regulations and policies affecting the banking and financial sectors can also influence mortgage rates. For example, regulations related to capital requirements or mortgage lending standards can affect the cost of providing mortgages for lenders, which may in turn impact mortgage rates.

5. **Fiscal Policy:** Government fiscal policies, such as tax policies and government spending, can affect overall economic conditions, which in turn can influence interest rates, including mortgage rates.

Overall, government policies can have a significant impact on mortgage interest rates, both directly and indirectly, through their effects on economic conditions, monetary policy, and financial market dynamics.

The government regulates adjustable-rate mortgages (ARMs) through the Department of Housing and Urban Development (HUD) and the Federal Housing Administration (FHA) . The FHA insures ARMs, and HUD regulates them through the Office of Housing. The government also regulates ARMs through the Truth in Lending Act (TILA) and Regulation Z, which require lenders to be transparent about credit terms, fees and interest rates. Additionally, the Real Estate Settlement Procedures Act (RESPA) prohibits real estate agents from receiving kickbacks and restricts lenders from demanding that borrowers use a preferred title insurer.