Government announces new mortgage relief programs

Mortgage News > Government announces new mortgage relief programs

Date: 11/25/2008

In a continuous effort to provide relief to our nation's current financial market the government announced a pair of new programs that will make $800 billion available in an attempt to thaw out consumer debt and make borrowing more affordable and available.

$200 billion will be allotted to and available for those with consumer debt, such as holders of securities backed by an assortment of consumer loans namely credit cards, auto and student loans. The objective of such a loan is to increase consumer demand once again for such securities by making them more readily available and lowering the interest rates customers have to pay.

In addition, the Fed will buy roughly $600 billion in mortgage-backed assets in a separate effort to combat the current financial turmoil that exists in the nation.

The Fed also announced the purchasing of $100 billion in direct obligation from Fannie Mae, Freddie Mac, and the Federal Home Loan Banks. The Fed will also purchase, according to the Associated Press, "$500 billion in mortgage-backed securities, pools of mortgages that are bundled together and sold to investors."

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