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Fed to Take Action on Mortgage Backed Securities

January 1, 2009

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.

To read the FAQ’s of what is being proposed click here.

Early speculation is this will lower mortgage interests rates even further in the months ahead.  Possibly the way out of the recession for most of the country.

Time will tell.  Meanwhile, I’m getting ready to refinance my mortgage.

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