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Increasingly, lenders concerned themselves more with the quantity of mortgages they sold than with their quality.
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It will take a considerable cut in rates from today's relatively low levels to stimulate the quantity of mortgage and state debt refinancings that provided so much buying power in the 1990's, when such rates hit 8and9percentent.
A huge quantity of mortgage paper is packaged and sold to investors every year, a lot of it by the two federal entities set up for this very purpose: Fannie Mae and Freddie Mac.
Some Fed officials have advocated that the Fed buy large quantities of mortgage-backed securities, which could further reduce interest rates on mortgage loans.
The US has not purchased private sector assets, although it has purchased large quantities of mortgage-backed securities and it will buy more as part of Operation Twist.
It is holding short-term interest rates near zero, and has tried to reduce long-term rates by purchasing huge quantities of mortgage-backed securities and Treasuries.
So the Fed announced it would buy large quantities of mortgage bonds until it was satisfied that the jobs market had "substantially" improved.
WASHINGTON — The Federal Reserve opened a new chapter Thursday in its efforts to stimulate the economy, saying that it intends to buy large quantities of mortgage bonds, and potentially other assets, until the job market improves substantially.
These considerations have suspended for now any movement toward a new round of stimulus, like the proposal by the Fed Governor Daniel K. Tarullo that the Fed should resume buying large quantities of mortgage-backed securities to reduce the cost of mortgage loans, increasing demand for housing.
WALL STREET JOURNAL Fed Ties Aid to Economic Recovery | The New York Times reports: "The Federal Reserve opened a new chapter Thursday in its efforts to stimulate the economy, saying that it intends to buy large quantities of mortgage bonds, and potentially other assets, until the job market improves substantially.
While many European banks held dangerous quantities of American mortgages in 2008, American banks today have relatively little exposure to Europe's troubled sovereigns.
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