Sweet Orange

Recently, I wrote a post about the Fed’s mortgage-backed securities buy-back program. In that post, mortgage exec Randy Johnson and vice president of HSH Associates (a mortgage-education company) Keith Gumbinger predicted that mortgage rates will go up after March 31, 2010. March 31st is the date the  buy-back of mortgage-backed securities by the Federal Reserve is scheduled to end. An article from Matt Padilla provides more information, and a different perspective, on the mortgage back securities (MBS) buy-back program.

Here is a quote from the Padilla’s article that states this different perspective:

Mortgage strategists at Credit Suisse say the slowdown in Fed purchases will not affect MBS spreads to any large degree. “The Fed’s exit from the MBS purchase program will likely be well absorbed by the market,” according to a weekly Credit Suisse “Market Watch” publication. After March 31, the “Fed will likely assume a backstop role for the MBS market to prevent a double dip in housing,” Credit Suisse strategists say.–Matt Padilla, “Treasury mum on halting mortgage-security purchases“