Let’s walk away from the real estate market for a few moments and talk about Wall Street. What was the big news today on Wall Street? Wall Street experienced huge gains today in the markets. The Federal Reserve announced that they would provide $200 billion in Treasury securities for 28 days in return for mortgage back securities. What does this mean?
Mortgage Backed securities have not been very desirable with all of the uncertainty in the mortgage market. This will help increase the demand for mortgage backed securities and supply liquidity to help revive a market that appears to be really locked up by the fear of where mortgage back securities may be heading.
By no means does this mean we are coming out of the current housing crises but it could be considered a small step in the right direction. It’s very important to restore confidence to mortgage back securities and make investors feel comfortable investing in them again.
This will be a short term fix and be in effect for 28 days. We will see how things go and over time the real estate market will come back and be stronger then ever but it will also take time to get past this current run of loans that are experiencing default rates higher then investors hoped for.
Wall Street’s Biggest Gain in 5 Years!