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FED prepares to end GSE $1.25 Trillion loan purchase plan-possibly early!

Discussion in 'Fannie Mae, Freddie Mac, USPAP' started by Mike Kennedy, Sep 24, 2009.

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  1. Mike Kennedy

    Mike Kennedy Elite Member

    58
    Sep 28, 2003
    Professional Status:
    Certified Residential Appraiser
    State:
    New York
    "After its two-day meeting, the Federal Open Market Committee said a program to purchase $1.25 trillion worth of mortgage-backed securities issued by firms like Fannie Mae and Freddie Mac will be allowed to expire by the end of March 2010. The move follows the committee's action at its previous meeting to wrap up a program to buy $300 billion in Treasury bonds by the end of October.

    The decision was unanimous, continuing a period of unanimity on the committee that dates to March. There had been speculation that one or more presidents of regional Fed banks might dissent, as some have expressed greater eagerness than Bernanke to unwind the Fed's unconventional programs, perhaps even ending the purchases of mortgage-backed securities before the full $1.25 trillion is deployed. "

    http://www.washingtonpost.com/wp-dy...ewsletter&wpisrc=newsletter&wpisrc=newsletter
     
  2. Randolph Kinney

    Randolph Kinney Elite Member
    Gold Supporting Member

    52
    Apr 7, 2005
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    As soon as the federal reserve's presence begins to fade, the mortgage interest rates will begin to rise as the appetite by real investors for GSE bonds over US Treasuries will fade with it. At some higher interest rate, more investors will appear. However, sovereign funds won't be the buyer at any interest rate because of the dollar over exposure. It would have to be domestic investors or international hedge funds that hedge against currency.
     
  3. fifteen

    fifteen Senior Member

    0
    Nov 15, 2008
    Professional Status:
    Certified Residential Appraiser
    State:
    Washington
    I can't see the market for MBS's growing without the Fed. People/investors have been burnt and with the amc mbs's floating around, someones going to review them and see they're all crap. Investors will demand higher quality appraisals but by then rates could be 7% or more and the $1.25 trillion in MBS's - well, what are they going to do with them when they find out they're worthless to investors? Another bubble set to burst? If Japan and China stop buying treasuries, we're screwed. Anybody think they'll buy the dross (skippy appraisals) the big banks are foisting as rigorously and stringently monitored? I'm glad they're ending this spending spree for the banks. Stronger dollar maybe, inflation probable. JMO.
    BTW - Good post Randolph

    Tell me this isn't about bonuses.
     
    Last edited: Sep 24, 2009
  4. PropertyEconomics

    PropertyEconomics Elite Member

    0
    Jun 19, 2007
    Professional Status:
    Certified General Appraiser
    State:
    New Mexico
    This Fed has caused as many problems as it has solved. Only with rising interest rates will this crisis come to a close. Keeping money artifically cheap has worsened the crisis not helped it ... Volker knew what needed to be done in the late 70s and early 80s and he did it ... this Fed has no backbone and the crisis may get worse before it gets better.

    Higher interest rates and severe inflation are on the horizon.
     
  5. Workbox

    Workbox Elite Member

    1
    Mar 2, 2005
    Professional Status:
    Certified Residential Appraiser
    State:
    Colorado
    I think they need to get here soon. We need to get over it and move on.
     
  6. redfish

    redfish Senior Member

    27
    Sep 2, 2007
    Professional Status:
    Certified Residential Appraiser
    State:
    Michigan
    Onward downward and then upward..............hopefully
     
  7. Workbox

    Workbox Elite Member

    1
    Mar 2, 2005
    Professional Status:
    Certified Residential Appraiser
    State:
    Colorado
    Like my mother used to say, "You better finish that plate or I swear......." but in spanish. :laugh: It was always easier to wash clean plates, she never liked left overs.

    I hope some of you get it.
     
  8. redfish

    redfish Senior Member

    27
    Sep 2, 2007
    Professional Status:
    Certified Residential Appraiser
    State:
    Michigan

    When my disposal broke I just bought a dog. :laugh:
     
  9. Doug DeMars

    Doug DeMars Senior Member

    0
    Mar 20, 2009
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    I smell inflation in the air too. I'm just not too sure how to navigate it yet. I'm too young at 39 to have first hand experience of what kind of storm is brewing.
     
  10. Sierra Dale

    Sierra Dale Sophomore Member

    1
    Mar 31, 2006
    Professional Status:
    Licensed Appraiser
    State:
    Nevada
    I attended an AI lunch that featured an economic speaker with international exposure. He said to watch the way Japan went as they had a similiar meltdown in the housing and lending market 12? years ago. He said that the market still has not recovered in Japan and that we were doing similiar plans for recovery. I did not finish my lunch.
     
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