From AP article "Bernanke said another economic support program aimed at driving down mortgage rates and bolstering the housing market is on track to end in March. By then, the Fed will have finished buying $1.25 trillion in mortgage securities from Fannie Mae and Freddie Mac. It will also have finished buying $175 billion in debt from the mortgage giants.” click on title above or cut and paste at bottom for full article
When the Fed stops this program who will step in to buy these securities?
How much of your retirement money would you like to invest on mortgage backed securities for buyers with 620 credit scores, no real down payments, 5% interest rates and knowing that we are still at least 2 years from the peak of foreclosures?
If you wouldn’t want to lend your money to those borrowers who will?
Oh wait, I know, sovereign wealth from other countries around the world will rush in to buy it up because they aren’t worried about other debt instruments they have purchased from places like Dubai, Iceland, Ireland, Italy, Greece, Portugal, Spain, Latvia, Lithuania, etc right???
http://finance.yahoo.com/news/Bernanke-outlines-plan-for-apf-1769220923.html?x=0&sec=topStories&pos=main&asset=&ccode=
