MBS and rates…continued

Posted on May 26, 2009. Filed under: Interest Rates | Tags: |


Money

The treasury continues to create and send money over to the Federal Reserve who in turn completes the spin cycle and purchases governtment issued bonds.  All this with the goal of keeping mortgage interest rates low long enough for to bring home buyers off the fence and allow many with little-to-zero equity to refinance.  To date they are just under half-way through the total amount of dollars set aside for the purchase of Mortgage Backed Securities (MBS).  The Federal Reserve is managing MBS spending and trying to balance the see-saw involving enough purchased to keep rates low versus too much, leading to running out of funds too soon.  So far the efforts have created results that seems to be “as planned”.  Many thousands of people with lost equity have refinanced and many more will do so over the 6-8 months.

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