The Fed agreed to purchase $100 billion in direct obligations from mortgage giants Fannie Mae and Freddie Mac as well as the Federal Home Loan Banks. It also will purchase another $500 billion in mortgage-backed securities, pools of home mortgages that are bundled together and sold to investors. The Fed chairman Sheila Bair continues to encourage mortgage lenders to be more pro-active with affordable home loan modifications to maintain liquidity and promote more foreclosure prevention programs.
Treasury Secretary Henry Paulson had said recently that the government was working on the new program, which will be supported by $20 billion of credit protection provided by the $700 billion bailout fund.Check back for the latest Mortgage News. Read the complete article > Will the Fed Buying Bad Credit Home Loans Help Housing and Credit Markets Recover?
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