Federal banks can buy more mortgage-backed debt
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fannie mae, feds, freddie mac March 25th, 2008The nation’s 12 Federal Home Loan Banks were freed Monday to boost their purchase of mortgage-backed bonds by about $150 billion — another government step to pump money back into a market that slumped as the housing crisis deepened.
Directors of the Federal Housing Finance Board, the banks’ regulator, approved the temporary increase. The purchases will be restricted to bonds guaranteed by housing finance giants Fannie Mae and Freddie Mac, the board said.
The approval for Federal Home Loan Banks to increase their purchases comes a week after Fannie Mae and Freddie Mac were cleared to buy at least $200 billion of mortgage securities to add to their already huge portfolios.
“Every marginal investor helps,” said Andrew Harding, who helps manage $18 billion as chief investment officer for fixed income at Allegiant Asset Management in Cleveland.
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Tags: fannie mae, feds, freddie mac
