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November 16, 2012

What More Can the Federal Government Do to Revive Mortgage Markets?

Category: Published Articles – admin – 11:53 am

Over the last four years, the Federal Reserve and the Obama Administration has increased their commitment buying mortgages on the secondary market, printed more money and bought the interest rates down to their lowest levels in history. Obama convinced Fannie Mae and Freddie Mac to ditch loan to value requirements completely under the Home Affordable Act.

Needless to say, Barrack Obama has supported federal mortgage relief for distressed real estate markets across the country. The U.S. housing market, despite nascent signs of revival, is still plagued by tight credit, underwater borrowers and overdue loans, Federal Reserve Chairman Ben Bernanke said in a speech Thursday that expressed a great deal of caution about the progress of the U.S. economic recovery.

The comments were notable because the Fed in September launched a program to buy $40 billion per month of mortgage-backed securities, a plan designed in part to ease mortgage lending to support a housing rebound.  The central bank said it would keep buying bonds until it saw substantial progress in the economy, most notably in the job market. But the Fed chairman played down how much progress has been achieved in the critical housing sector. “Although there are good reasons to be encouraged by the recent direction of the housing market, we should not be satisfied with the progress we have seen so far,” Mr. Bernanke said at a housing conference in Atlanta.  Read the complete WSJ post.

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