In states where adjustable-rate or exotic mortgages were more prevalent than traditional loans, home values fell 39% on average, compared to a 5% decrease in more conservative states, according to Freddie Mac chief economist Amy Crews Cutts. In a perspective published Monday, Crews Cutts said more traditional mortgages have saved many homes since foreclosures began mounting in 2007. "The long-term, fixed-rate mortgage has emerged as an economic shock absorber for millions of households and thousands of neighborhoods during the current downturn," Crews-Cutts said. When subprime loans began to deteriorate and investors began pulling capital out of the market, many borrowers with adjustable-rate mortgages could not refinance and avoid the interest-rate resets. Subprime and ARMs accounted for nearly half, 47%, of all foreclosures started in the first half of 2010. Crews Cutts went on to compare state home price indices vs. FRM totals for all 50 states and found that the states where home prices fell the most, fewer borrowers had prime FRMs, FHA or VA mortgages. Only 51% of mortgages in Nevada were long-term FRMs, and home prices consequently dropped 52% from 2005 to 2007. Home prices in South Dakota, North Dakota and Texas, however, dropped on average 5%, while no fewer than 70% of the borrowers in those states had FRMs. Scott Norman, the president of the Texas Mortgage Banker's Association said Texas has been shielded from the real estate bust because its citizens didn't refinance and cash-out the equity in their homes nearly as often as some other states. "Without question, Texas was shielded from the housing bubble," Norman said in an interview with HousingWire in July 2009. "While our markets have seen numerous soft spots, we should recover quicker and stronger than most. As in the past, residential real estate and job growth will lead the way." In 2005, the $1.49 trillion in ARM originations equaled 47.7% of the housing market. But in 2009 that number dropped significantly. Lenders wrote $114 billion in ARMs in 2009, for 6.2% of the market. Write to Jon Prior.