$1.45 Trillion In Mortgage Debt Bought By Fed - Feldman Law Center

With the markets appearing to possibly be rebounding from record losses, economic experts are scrambling to ensure the small improvement catapults as far as possible within the current struggling American economic situation. Thus, to help this improvement gain even more momentum, the Fed announced a plan to buy $300 million in T-Bills. In addition, the Fed also included a promise to buy $1.45 trillion in mortgage debt.

While some people are confused on why this drastic measure is being taken, the main goal is to stimulate banks and lenders to begin lending money again. Ultimately, the stimulation of banks and lenders to actually lend is the main goal of all government stimulus packages. When the housing market began to show signs of economic distress, lenders tightened up their lending practices. However, when foreclosures became an everyday occurrence, they began to practically halt all lending altogether which created an intense economic problem in America.
Thus, lately bills focusing on loan modification (such as the newly House approved “Helping Families Save Their Homes in Bankruptcy Act of 2009”) are in the forefront to not only help those homeowners who can no longer pay their mortgages, but also help stimulate lenders and banks to begin lending again.

After the Fed announced their $1.45 trillion mortgage debt promise, long term interest rates dropped immediately. Thus, all financial analysts on Wall Street applauded the Fed for their continuous efforts to help the American economic conditions improve for the long haul. While it’s clear the mortgage debt will be bought by the Fed, it’s unclear whether these strategies will actually show a long term positive economic growth in America or if the action will only show temporary short-term economic improvements overall.

According to Bloomberg, the decision will add $750 billion in the purchases of mortgage-backed securities issued by the government this year (Fannie Mae, Freddie Mac, Ginnie Mae). Coupled with a previous plan of $217.1 billion in net purchases by the Fed out of $500 billion through June, this could lead to great economic stability.

For those homeowners struggling to pay their mortgage, this news may be welcomed. However, many are still in need of immediate assistance to avoid default and foreclosure. They can gain assistance from The Feldman Law Center by visiting www.FeldmanLawCenter.com, where professionals can help homeowners negotiate with lenders and avoid home foreclosure. Whether a homeowner is under financial hardship and cannot pay their mortgage, think they’ve been a victim of predatory lending on their mortgage, already have a foreclosure date set up or want to avoid their credit being ruined for the next ten years due to foreclosure, there is help to be had at The Feldman Law Center.