The Government and Mortgage Backed Securities
The Federal Reserve is no longer buying mortgage backed securities from Fannie Mae and Freddie Mac. Some people worry mortgage rates could rise as a result. This video explains why home mortgage rates could increase.
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Low Rates – Homebuyers Tax Credit
homebuyers tax credit
The Fed did what they set out to do – purchasing $1.25 Trillion in Mortgage Backed Securities, and succeeding in their plan to lower home loan rates and help stabilize the housing sector. And even though they stretched out the length of the program slightly – in order to soften the impact of the end of the program – the training wheels are now off, the safety net is gone, and home loan rates have already moved higher. In fact – as the Fed will now gradually become a seller of their massive holdings of Mortgage Backed Securities – rates are very likely to continue to move higher still.
