The Federal Housing Finance Board (FHFB) drew praise from the Mortgage Bankers Association (MBA) on Monday when the agency said it will allow Federal Home Loan Banks to expand their acquisition of mortgage-backed securities in the GSE marketplace. It’s an initiative that is expected to pump $100 billion in additional liquidity into the marketplace.
“Combined with last week’s OFHEO action lowering Fannie’s and Freddie’s capital requirements so they can purchase additional mortgages and private label MBS, this will provide another booster shot of liquidity to the mortgage market,” said Kieran Quinn, chairman of the MBA. “This is something MBA has been advocating since the credit markets seized this past August.”
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