This is important information. What I’ve found and present below is that the Federal Reserve is not just supporting the housing market, it is the housing market.
Just as important as a person’s desire to buy a home is their ability to gain access to mortgage funding.
The mortgage market is a gigantic beast with many moving parts, but it is pretty easy to understand from a high level.
The process works like this: A homeowner secures a mortgage from a bank or mortgage company. Then the mortgage is sold off to another company, with the cash generated by that sale now available to lend to other potential homeowners. Ultimately the mortgage may pass through several sets of hands but ultimately it lands with a terminal holder.
Continue reading Federal Reserve Buys More Than 100% of Mortgages Issued in 2009