Free Republic
Browse · Search
News/Activism
Topics · Post Article

Skip to comments.

Fed Pulls Trigger, to Buy Mortgages in Effort to Lower Rates
Yahoo! Finance/CNBC ^ | Sept. 13, 2012 | Jeff Cox

Posted on 09/13/2012 11:01:38 AM PDT by Free ThinkerNY

The Federal Reserve fulfilled expectations of more stimulus for the faltering economy, taking aim now at driving down mortgage rates.

The Fed said it will buy $40 billion of mortgages per month in an attempt to foster a nascent recovery in the real estate market. The purchases will be open-ended, meaning that they will continue until the Fed is satisfied that economic conditions, primarily in unemployment, improve.

There's strong hints that they'll do Treasurys next," Joe LaVorgna, chief economist at Deutsche Bank Advisors, said in a phone interview from London."They're pulling out all the stops to try to get this economy to gain some traction and, most important, to get unemployment down."

Enacting the third leg of quantitative easing will take the Fed's money creation past the $3 trillion level since it began the process in 2008.

"The Committee is concerned that, without further policy accommodation, economic growth might not be strong enough to generate sustained improvement in labor market conditions," the Open Market Committee said in a statement.

(Excerpt) Read more at finance.yahoo.com ...


TOPICS: Breaking News; News/Current Events
KEYWORDS: bailout; bernanke; demonizingbernanke; demonizingthefed; dollardevaluation; fed; federalreserve; mortgages; porkulus; qe3; spending; thefed; waronbernanke; waronthefed
Navigation: use the links below to view more comments.
first 1-5051-91 next last

1 posted on 09/13/2012 11:01:43 AM PDT by Free ThinkerNY
[ Post Reply | Private Reply | View Replies]

To: Free ThinkerNY

It’s so reassuring, knowing that our nation’s money supply is in the hands of Ivy League grads who know more than everyone else.


2 posted on 09/13/2012 11:04:11 AM PDT by lurk
[ Post Reply | Private Reply | To 1 | View Replies]

To: lurk

Yeah...right. We are in what’s called the Keynesian Liquidity Trap which makes monetary policy totally ineffective. All monetary policy can hope to do here is raise prices. What’s called for is fiscal policy. In this case, since the previous stimulus spending was a total bust, what’s needed is a massive tax cut to shift the IS curve outward. I don’t think the people in Washington have the stones to do it.


3 posted on 09/13/2012 11:08:58 AM PDT by econjack (Some people are as dumb as soup.)
[ Post Reply | Private Reply | To 2 | View Replies]

To: Free ThinkerNY

yeah...they’re gonna get those mortgages OFF the banks’ books
before they all blow this fall


4 posted on 09/13/2012 11:15:47 AM PDT by mo (If you understand, no explanation is needed. If you don't understand, no explanation is possible.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: econjack

Tax cutting is reliquishing power to the “little people” and that can’t be allowed. The insiders want power and want to keep power. Obama is now beholding to useful idiot bernake. Obama does not share power.


5 posted on 09/13/2012 11:16:20 AM PDT by longtermmemmory (VOTE! http://www.senate.gov and http://www.house.gov)
[ Post Reply | Private Reply | To 3 | View Replies]

To: Free ThinkerNY

Idiots.


6 posted on 09/13/2012 11:21:14 AM PDT by Jim Robinson (Resistance to tyrants is obedience to God!!)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Free ThinkerNY

So does this mean some people will now send their mortgage payments to Bernanke?

I know stimulus like this is a bust...but in the mechanics of it, what does it mean will happen?

A ridiculous Keynesian type policy.


7 posted on 09/13/2012 11:24:36 AM PDT by SoFloFreeper
[ Post Reply | Private Reply | To 1 | View Replies]

To: Free ThinkerNY

Don’t think this will have a huge impact on the economy or the real estate market. Some of that depends on WHICH mortgages they go after. Ideally, if they buy up a mortgage there is something of value attached to that mortgage. If the process happens as I expect though, a bunch of Dem cronies will be selling off mortgages for badly-overvalued propoerties, and the only benefit the country will see is... nothing.


8 posted on 09/13/2012 11:25:41 AM PDT by AzSteven ("War is less costly than servitude, the choice is always between Verdun and Dachau." Jean Dutourd)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Free ThinkerNY

The Bernank is now “all in” with Obama.

He has pulled out the stops and is trying to buy Obama the election with printed U.S. currency.

If the Bernank loses, he is done as is the Fed’s “dual mandate.” Let’s hope he loses and we can get our currency back.


9 posted on 09/13/2012 11:30:47 AM PDT by LowTaxesEqualsProsperity
[ Post Reply | Private Reply | To 1 | View Replies]

To: Free ThinkerNY

30 year fixed mortgage is at 3.25% - how much lower do they want it ?


10 posted on 09/13/2012 11:33:35 AM PDT by PMAS (All that is necessary for the triumph of evil is that good men do nothing)
[ Post Reply | Private Reply | To 1 | View Replies]

To: econjack
-----All monetary policy can hope to do here is raise prices. -----

That is the intent. The mechanism is devaluation precipitating the price rise you noted. That effectively means the debt is devalued and when there is enough debt devaluation to be comfortable the QE can cease. It is the only way the debt can be reduced. There will not be adequate growth or revenue to pay it off.


11 posted on 09/13/2012 11:33:54 AM PDT by bert ((K.E. N.P. N.C. +12 ..... Present failure and impending death yield irrational action))
[ Post Reply | Private Reply | To 3 | View Replies]

To: mo

“yeah...they’re gonna get those mortgages OFF the banks books”

You got that straight. Phony MBS paper makers, with no collateral. (and their so called “insurance” company backers and equity holders.)

They’re chompin-at-the-bit, to get hold of everyones wallets with Extortion-Care, as soon as possible.


12 posted on 09/13/2012 11:41:24 AM PDT by Varsity Flight (Extortion-Care is the Government Work-Camp: Arbeitsziehungslager)
[ Post Reply | Private Reply | To 4 | View Replies]

To: Free ThinkerNY

What will FedGov™ do once they hold paper on poor underclass borrowers?


13 posted on 09/13/2012 11:52:34 AM PDT by central_va ( I won't be reconstructed and I do not give a damn.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Free ThinkerNY
The Federal Reserve fulfilled expectations of more stimulus for the faltering economy, taking aim now at driving down mortgage rates.

This is a bogus claim.

Mortgage rates are within a historically lows range.

Buying a home in the Carter years you were lucky to get a mortgage at 10%.

The real reason for this is to make Obama look good until the morning of November 7th and everyone knows that to be the truth.


14 posted on 09/13/2012 11:56:56 AM PDT by Iron Munro ("In any compromise between good and evil, it is only evil that can profit." - Ayn Rand)
[ Post Reply | Private Reply | To 1 | View Replies]

To: All

Up next.. releasing the strategic petroleum reserves to get gas down below $4 per gallon in time for elections.. but as many here keep stating, Romney would be worse.. (sarc)


15 posted on 09/13/2012 11:57:24 AM PDT by newnhdad (Where will you be during the Election Riots of 2012/2013?)
[ Post Reply | Private Reply | To 13 | View Replies]

To: PMAS

Have a friend making on offer on a repo right now,she got a 30 year fixed at 2.5%.


16 posted on 09/13/2012 12:02:02 PM PDT by mdittmar
[ Post Reply | Private Reply | To 10 | View Replies]

To: Free ThinkerNY

Au and Ag are nice investments in climates like this.


17 posted on 09/13/2012 12:04:17 PM PDT by Neoliberalnot (Marxism works well only with the uneducated and the unarmed.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Free ThinkerNY

What a bunch of fools.


18 posted on 09/13/2012 12:07:13 PM PDT by GeronL (The Right to Life came before the Right to Pursue Happiness)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Free ThinkerNY

I wonder what will happen when FedGov owns 80% of all the mortgages? That’s a lot of power.


19 posted on 09/13/2012 12:08:56 PM PDT by DBrow
[ Post Reply | Private Reply | To 1 | View Replies]

To: Free ThinkerNY

“obozo re-elected in a landslide. Free skittles for all!”


20 posted on 09/13/2012 12:10:20 PM PDT by dynachrome ("Our forefathers didn't bury their guns. They buried those that tried to take them.")
[ Post Reply | Private Reply | To 1 | View Replies]

To: Free ThinkerNY

So, with QE-3, Helicopter Ben is buying up mortgages to benefit a privileged class (homeowners) and discriminate against others.


21 posted on 09/13/2012 12:13:54 PM PDT by AlanGreenSpam (Obama: The First 'American IDOL' President - sponsored by Chicago NeoCom Thugs)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Neoliberalnot

You might want pick up some Pb !
BLOAT


22 posted on 09/13/2012 12:17:50 PM PDT by GOYAKLA (Recall/ Impeachment Day, November 6, 2012. FUBO, same for RINOs)
[ Post Reply | Private Reply | To 17 | View Replies]

To: Free ThinkerNY

Never thought I would miss the Carter days, but more things like this make me wax rhapsodic for those good old days (both equally incompetent, but at least Carter wasn’t determined to destroy the country)


23 posted on 09/13/2012 12:21:50 PM PDT by markomalley (Nothing emboldens the wicked so greatly as the lack of courage on the part of the good -- Leo XIII)
[ Post Reply | Private Reply | To 1 | View Replies]

To: LowTaxesEqualsProsperity
You know, I said on this forum the the Fed would do this and even adjusted my investment portfolio to make some money if it did

But I still can't believe it happened and is so blatant an effort to prop up a communist pos like obama

I suppose by October they'll tap the strategic petroleum reserve to knock down the price of gas below $4 a gallon

God Help Us all

24 posted on 09/13/2012 12:29:01 PM PDT by silverleaf (Age takes a toll: Please have exact change)
[ Post Reply | Private Reply | To 9 | View Replies]

To: GOYAKLA

Excellent asset protection program suggestion.


25 posted on 09/13/2012 12:29:57 PM PDT by Neoliberalnot (Marxism works well only with the uneducated and the unarmed.)
[ Post Reply | Private Reply | To 22 | View Replies]

To: Free ThinkerNY

Aren’t mortgage rates already ridiculously low?


26 posted on 09/13/2012 12:29:57 PM PDT by dfwgator (I'm voting for Ryan and that other guy.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: silverleaf

hw many of those loans will be converted into never pay back loans? IOW a loan will be “modified” into a $0 dollars per month payment and declared a performing loan.


27 posted on 09/13/2012 12:34:52 PM PDT by longtermmemmory (VOTE! http://www.senate.gov and http://www.house.gov)
[ Post Reply | Private Reply | To 24 | View Replies]

To: Free ThinkerNY; Oldeconomybuyer

Disgusting. Will this help re-elect Obama, or will it possibly backfire?


28 posted on 09/13/2012 12:36:28 PM PDT by nutmeg (I'm with Sarah Palin and Ted Cruz: "ABO"/Ryan 2012)
[ Post Reply | Private Reply | To 1 | View Replies]

To: DBrow

I think they already do. Probably even higher for student loans, and going higher.


29 posted on 09/13/2012 12:39:25 PM PDT by TurboZamboni (Looting the future to bribe the present)
[ Post Reply | Private Reply | To 19 | View Replies]

To: AlanGreenSpam
Big Ben:


Baby Ben:


30 posted on 09/13/2012 12:46:16 PM PDT by djf (Political Science: Conservatives = govern-ment. Liberals = givin-me-it.)
[ Post Reply | Private Reply | To 21 | View Replies]

To: Free ThinkerNY
Mortgage rates are not too high at 3.8% for 30 year fixed and 2.75% for a 5/1 ARM. The problem is the economy, not interest rates. The solution is less frivolous spending, not more.
31 posted on 09/13/2012 12:53:49 PM PDT by Pollster1 (Freedom is never more than one generation away from extinction. - Ronald Reagan)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Free ThinkerNY

Mortgage rates are at record lows. Why is this necessary? How much lower can the rates go?


32 posted on 09/13/2012 1:01:26 PM PDT by rawhide
[ Post Reply | Private Reply | To 1 | View Replies]

To: Free ThinkerNY

We’re be stimulated on again.


33 posted on 09/13/2012 1:07:26 PM PDT by Leep (I'm a Chic-Fil-- A-merican)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Leep

be=being
ugh!


34 posted on 09/13/2012 1:10:13 PM PDT by Leep (I'm a Chic-Fil-- A-merican)
[ Post Reply | Private Reply | To 33 | View Replies]

To: Pollster1

I talked with the bank that holds our morrtgage about refinancing using the gov’t HARP program. We bought about 3 years ago @ a 5% interest rate, but if we could get a lower rate would save a lot of money over the long term. We have an almost perfect credit score and they quoted us a rate of 4.625%. I didn’t understand it being so high.


35 posted on 09/13/2012 1:12:31 PM PDT by Roos_Girl (The world is full of educated derelicts. - Calvin Coolidge)
[ Post Reply | Private Reply | To 31 | View Replies]

To: Free ThinkerNY

$40 billion a month is $480b a year!!

The economy is $15,090 billion a year. This is 3.2% of GDP!

Without QE, the official numbers would show recession.

WE ARE IN A RECESSION, FOLKS!

Romney/Ryan, is your staff reading this? Please get the word out to the sheeple during the debates!!


36 posted on 09/13/2012 1:15:50 PM PDT by AlanGreenSpam (Obama: The First 'American IDOL' President - sponsored by Chicago NeoCom Thugs)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Free ThinkerNY

Part 2 of the September surprise.


37 posted on 09/13/2012 1:24:55 PM PDT by RKBA Democrat (Vote for willard - he doesn't need to earn your vote, he's entitled to it.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Free ThinkerNY; P-Marlowe

How low can mortgage rates go?

Bloomberg.com currently has the 30 year fixed at 3.57% and the 15 year fixed at 2.93%.

I do not see how this will start a building boom, but I do see how it can start a refinancing boom, and each refinance is a host of fees, points, and etc. that probably net a bank a percentage or two of the refinance.

I also see how it could unstuck the used home market with used homes at lows and rates at lows. Qualifying for the loan is an issue, but with lower monthly payments more will qualify. It really strikes me as a buyers market.

So, how low will the rates go?

Also, and sadly, where is the Fed getting all this money?

Printing it.

Inflation is going to take off crazily at some point. We can only hope that wages match it when it finally strikes. They normally don’t.


38 posted on 09/13/2012 1:32:30 PM PDT by xzins (Retired Army Chaplain and Proud of It! True supporters of our troops pray for their victory!)
[ Post Reply | Private Reply | To 1 | View Replies]

To: xzins
Also, and sadly, where is the Fed getting all this money?

Got a mirror?

39 posted on 09/13/2012 1:33:35 PM PDT by dfwgator (I'm voting for Ryan and that other guy.)
[ Post Reply | Private Reply | To 38 | View Replies]

To: mdittmar

Where ? - please tell


40 posted on 09/13/2012 1:34:51 PM PDT by PMAS (All that is necessary for the triumph of evil is that good men do nothing)
[ Post Reply | Private Reply | To 16 | View Replies]

To: Free ThinkerNY

Ok, so we FINALLY just outright buy the houses for these people that should have never been given a loan in the first place. Except we took the long way around and NO ONE has any jobs! Thanks BARNEY!


41 posted on 09/13/2012 1:35:31 PM PDT by The Toll
[ Post Reply | Private Reply | To 1 | View Replies]

To: SoFloFreeper
[So does this mean some people will now send their mortgage payments to Bernanke?]

I think in this case a lot them weren't sending in their mortgage payments.

42 posted on 09/13/2012 1:37:47 PM PDT by Brad from Tennessee (A politician can't give you anything he hasn't first stolen from you.)
[ Post Reply | Private Reply | To 7 | View Replies]

To: AlanGreenSpam

You post works for 30 second soundbites on the political trail for Romney/Ryan and their surrogates.

Contemplate that the $480B is going to free up large amounts of tier 3 reserves for banks, for what ever portion of the mortgage portfolios are bought from banks and not from Fannie/Freddie/Ginnie.

In the end though, we’re shifting chairs on the deck of the Titanic, taking FedGov backed mortgage portfolios off the Fannie/Freddie/Ginnie balance sheet and putting the same portfolios on the FedGov backed Federal Reserve balance sheet is just more of the privatising the upside and shifting the downside to the public treasury.

Well it’s one two three, what are we fighting for...

New Scheme:
Bank originates a mortgage, bank packages mortgage, banks sell conforming mortgage portfolios to Fannie/Freddie, banks sell non-conforming mortgage portfolios to Federal Reserve, Fannie/Freddie sell mortgage portfolios to Federal Reserve.

Besides adding another top layer of complexity, this isn’t going to do much to increase velocity or quantity of money.


43 posted on 09/13/2012 1:44:18 PM PDT by JerseyHighlander
[ Post Reply | Private Reply | To 36 | View Replies]

To: Iron Munro
...Buying a home in the Carter years you were lucky to get a mortgage at 10%...

Reagan years too. I bought my first house in 1987 with a 30yr mtg at 10%.

44 posted on 09/13/2012 1:47:06 PM PDT by FReepaholic (Stupidity is not a crime, so you're free to go.)
[ Post Reply | Private Reply | To 14 | View Replies]

To: dfwgator
got a mirror

LOL. They wish! I ain't got it.

The only thing I can think is that they print it or simply declare that they have "reserves" whether they do or not.

Do they tell the Treasury to print? Is that the way this works?

45 posted on 09/13/2012 1:50:04 PM PDT by xzins (Retired Army Chaplain and Proud of It! True supporters of our troops pray for their victory!)
[ Post Reply | Private Reply | To 39 | View Replies]

To: Free ThinkerNY
Ben on his way back to his hideaway.. uhhh BenCave..
tossing money as he tries to distract the media
46 posted on 09/13/2012 1:55:27 PM PDT by NormsRevenge (Semper Fi)
[ Post Reply | Private Reply | To 1 | View Replies]

To: dfwgator; xzins

The money isn’t coming from us... they’re creating it out of thin air (devaluing our savings in the process).


47 posted on 09/13/2012 2:00:15 PM PDT by MrB (The difference between a Humanist and a Satanist - the latter knows whom he's working fors)
[ Post Reply | Private Reply | To 39 | View Replies]

To: FReepaholic

I’m in a special situation with an ARM that can adjust up to 7%, which is still lower than I bought my first house at in the 90’s.


48 posted on 09/13/2012 2:03:34 PM PDT by MrB (The difference between a Humanist and a Satanist - the latter knows whom he's working fors)
[ Post Reply | Private Reply | To 44 | View Replies]

To: MrB; dfwgator

Do they print more money? Do they simply declare that they have it?


49 posted on 09/13/2012 2:05:30 PM PDT by xzins (Retired Army Chaplain and Proud of It! True supporters of our troops pray for their victory!)
[ Post Reply | Private Reply | To 47 | View Replies]

To: nutmeg

This is the FedPAC’s contribution to the Obama campaign. It makes no economic or constitutinal sense for the federal government to be a mortgage broker.


50 posted on 09/13/2012 2:08:19 PM PDT by Oldeconomybuyer (The problem with socialism is that you eventually run out of other people's money.)
[ Post Reply | Private Reply | To 28 | View Replies]


Navigation: use the links below to view more comments.
first 1-5051-91 next last

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
News/Activism
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson