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A 4.5% Mortgage In Every Pot

Embrace the New Deal!  The Bailout has made its way to Main Street.

The Fed’s gonna do it..for real:

The Federal Reserve on Tuesday announced that it expects to begin operations in early January under the previously announced program to purchase mortgage-backed securities (MBS) and that it has selected private investment managers to act as its agents in implementing the program.

Under the MBS purchase program, the Federal Reserve will purchase MBS backed by Fannie Mae, Freddie Mac, and Ginnie Mae; the program is being established to support the mortgage and housing markets and to foster improved conditions in financial markets more generally.

Here’s Sean Purcell and I, talking on BloodhoundBlog Radio, about today’s announcement (15 minute podcast)

PS:  Expect an orgy tomorrow and Friday, in the MBS markets….if the traders fly back from Cabo tonight

Related posts:
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  • Mortgage Rates Higher at the End of May
  • Ask the Mortgage Broker: On Title But Not On the Loan?

  • 5 comments

    5 Comments so far

    1. Aaron Dickinson - Edina Realty December 31st, 2008 7:19 am

      This is not the 4.5% proposal that NAR was floating, which included buying mortgages with newly issued T-Bills… this is the proposal back from a month or two ago for the Fed to simply buy mortgages from Fannie and Freddie so that they have more cash to lend out. At the time the announcement brought rates down dramatically and is largely responsible for our current market rates around 5%.

    2. Geno Petro December 31st, 2008 7:58 am

      I think I’ll wait for the lights to come back on before undressing for this orgy. I got tricked in Junior High….NEVER AGAIN!

    3. Sean Purcell December 31st, 2008 8:56 am

      Geno,

      As the great Fat Tony said on The Simpsons: “…you crack us so consistently up.”

    4. Eric Blackwell December 31st, 2008 9:14 am

      @Geno- LMAO…thank you for that…

    5. J Boyer Morristown NJ December 31st, 2008 2:29 pm

      Well lets hope the Geno doesn’t get tricked this time, then again somebody stand by with a robe to cover him up. hehe