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Fed Purchases $30B in Agency MBS

The ""New York Federal Reserve Bank"":http://www.ny.frb.org/ purchased $30.425 billion in mortgage-backed securities (MBS) from government agencies this week. Total MBS purchases since the Fed program began in early January now stands at $333 billion.
The U.S. central bank recently announced an aggressive move to buy up more debt in support of mortgage lending and housing markets. Federal Reserve officials said they are increasing MBS purchases to a total of $1.25 trillion for the year, from the previous commitment of $500 billion.
The central banks' expanded debt purchases are intended to drive down borrowing costs and mortgage rates, and keep them low through the remainder of 2009. The Fed's efforts thus far have sent rates for home loans plummeting well below the five percent mark. ""This week"":http://dsnews.comindex.php/home/news_story/2815, mortgage interest rates ticked up ever so slightly from the week before, but across the board, they are still sitting at record-low levels.
The gross amount of the Federal Reserve's ""MBS purchases"":http://www.newyorkfed.org/markets/mbs/ this week totaled $74.705 billion. The Fed bought $52.655 billion in mortgage securities from Fannie Mae, $21.2 billion from Freddie Mac, and $850 million from Ginnie Mae.
Although Ginnie Mae sits on the low end of the Fed's MBS purchase spree, the government-owned corporation said that all in all, it issued a record $34.5 billion in mortgage securities during the month of March. Ginnie brought a total of $89.7 billion in liquidity to the mortgage market in the first quarter of 2009, versus $38.9 billion for the first three months of 2008.
The U.S. central bank has also said it will double its purchases of debt from Fannie Mae and Freddie Mac this year, bringing total debt purchases to $200 billion. This week, the Federal Reserve bought $2.97 in ""direct obligations"":http://www.newyorkfed.org/markets/pomo/display/index.cfmxshowmore=1&opertype=orig from the GSEs. So far, it has purchased just over $50 billion outright agency securities.

About Author: Carrie Bay

Carrie Bay is a freelance writer for DS News and its sister publication MReport. She served as online editor for DSNews.com from 2008 through 2011. Prior to joining DS News and the Five Star organization, she managed public relations, marketing, and media relations initiatives for several B2B companies in the financial services, technology, and telecommunications industries. She also wrote for retail and nonprofit organizations upon graduating from Texas A&M University with degrees in journalism and English.
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