The Federal Reserve has become the bedrock of the mortgage market, whether it likes it or not. It's buying just about all of the Fannie Mae and Freddie Mac paper, the conforming kind, to provide badly needed liquidity in the secondary market. Private investors are almost non-existent over there; for lack of funds to participate, for still harboring loads of toxic home loan securities in their books or just being wary about getting back into the recently-devastated mortgage bond business.

In the Fed's August Federal Open Market Committee, or FOMC, meeting one of the topics around the table touched on the continuation of its aggressive purchasing program of these mortgage bonds. Since there are some cautious signs that the economy is about to turn around some members felt the critically-important effort should begin winding down. Winding down? That would be premature, to put it bluntly.

Las Vegas area - Henderson, Anthem, Summerlin, Sunrise Manor and North Las Vegas - real estate, to give an example, is still in slow motion, despite some news lately about increased resales. There is still a long way to go before "normal." The same can be said about many other markets, most notably large sections in Arizona, California and Florida. If the secondary mortgage market were to shrink with Fed pulling slowly out, it would roll back some of the nice gains achieved so far. It would delay a solid housing recovery by months, if not longer. And the entire economy would be slow in waking up since housing has such a large impact on it.

The private financial sector worldwide is not strong enough yet to step into the possible vacuum. The Fed's purchasing program should go on well into next year to assure the current gradual expansion gathers steam.