More fed meddling
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In an effort to boost the housing market, the federal reserve has taken a new and unusual step. Instead of merely buying treasury bonds to lower mortgage rates, it is now going to buy mortgage backed securities. You know them- the toxic ones that caused the problem in the first place.

This is new territory for the federal reserve. Is it even legal?

In order for housing to improve, credit restrictions have to be loosened. The pendulum that had swung so far one way in allowing anyone who could breathe to get a loan, has gone too far in the other direction. The credit requirements are so high that the percentage of people who actually qualify are very slim. There are still a lot of people who want to buy but are shut out of the housing market. That’s another reason you need to learn creative financing techniques.

To learn what really works in today's real estate market CLICK HERE

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More fed meddling — 6 Comments

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  2. Fed is buying these loans because most of these securitized loans were done illegally without the proper paperwork etc. Banks and mortgage lenders bundled loans quickly and sold it to Wallstreet who repackaged and sold it to investors, pension funds, SWFs etc. It was hard to keep track of who the actual owner of the note was and banks couldn’t prove they owned it because technically they did not. Most of the foreclosures that have taken place in the interim are therefore technically illegal and a lot of homeowners who lost their homes can file suit against the banks for illegally foreclosing on them. By buying up these loans, the FED is cleaning them of the book of the banks and making them kosher. Now the FED is the owner of these loans and you can’t file suit against them because all previous trail of paperwork has been wiped out. If this sounds too complicated it is but the above was explained to me by a prominent foreclosure attorney who has inside knowledge of all this.

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