The Fed Agrees to Buy Bad Mortgage Debt

By
Real Estate Agent with Whipple Auction & Realty, Inc.

The Federal Reserve has agreed to purchase housing related debts of Fannie, Freddie and Ginnie. More specifically $500 billion of Mortgate Backed Securities. They say, this will free up money for lending new mortgages and help drive down interest rates.  Once interest rates are decreased, more consumers will help reduce inventory. Lowering inventory will help increase purchase prices.

What does this do for people currently facing foreclosure?

The important question. Will this help the economy? I know there are some that believe this will only acerbate the problem.  I like to think that intervening will help, if it's done intelligently. However, I don't know if throwing money at the problem helps in the long term. I guess we'll have to see.

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Topic:
Mortgage / Finance
Tags:
market
nar
prices
debt
the fed
federal reserve
foreclosure
mortgage backed securities
mortgage

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Ambassador
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Respect Realty LLC
Respect Realty LLC - Milwaukie, OR
Brokers - Oregon / SW Washington Real Estate
I agree there has to be a plan or we are just throwing money at the problem with the hope it will help. I think they need to show us in writing what they plan to do with the money prior to us giving it to them. Hope your 1st month in the rain was a fun and informative one. see ya in the rain
Nov 29, 2008 02:04 AM #1
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