Categorized | Investing

Mortgage-Backed Securities-Should You Buy Them or Not?

Mortgage-Backed Securities-Should You Buy Them or Not?
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The Federal government of US has decided to stop the policy of buying and supporting mortgage-backed securities and the decision has been applied from the end of March, 2011. The federal government has taken this decision just for the sake of investors as well as distressed lenders so that their needs can be subsidized and capital facilities can be provided. This step was also necessary to keep the interest rates as low as possible.

Now, it is going to be very difficult to decide that will or will not the mortgage rates create any major upswings in the coming days of future. In a meeting session arranged with forbes.com, Mr. Freddie Mac CEO Ed Haldeman confirms that it is not necessary that there could be a single dislocation or major move up in the coming days unless the rates rise like skyrocket. Moreover, the mortgage-backed securities can still be purchased and the doors are still opened from the side of federal government.

The US mortgage bankers association has analyzed and determined that the applications against mortgage and real estate ratio is about 1.3% till the end of first week of March 2010. This figure shows the increase in the applications rates when compared with the rate of October 2009 which was only 6.8%. Now, the mortgage association confirms in Reuter’s report that this speed will be increased and can be tied to approach the deadline which would be considered as another great success for the government’s homebuyer’s tax credit.

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About Drew Wilson

Drew focuses on the Commercial and Mortgage/Finance categories.

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