Search

Fed’s Agency MBS Purchases Fall for Fourth Straight Week

by devteam August 6th, 2009 | Share

The Federal Reserve today reported on their weekly purchases of agency mortgage-backed securities (MBS). In the five trading days between July 30 and August 5, the Federal Reserve purchased a total of $19.15 billion agency MBS.  Since the inception of the program the Federal Reserve has spent $721.20 billion or 57.7% of the allocated $1.25 trillion.

The goal of the Federal Reserve's agency MBS program is to provide support to mortgage and housing markets and to foster improved conditions in financial markets more generally. Only fixed-rate agency MBS securities guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae are eligible assets for the program. The program includes, but is not limited to, 30-year, 20-year and 15-year securities of these issuers.

Of the $19.15 billion weekly purchases:

  • $1.9   billion  was used to buy 30 yr 4.5 MBS coupons.  9.92%   of total weekly purchases.
  • $11.2 billion was used to buy 30 yr 5.0 MBS coupons.  58.49% of total weekly purchases.
  • $6.05 billion was used to buy 30 yr 5.5 MBS coupons.  31.59% of total weekly purchases.

The Fed's daily average of MBS purchases was $3.83 billion per day, less than the previous week's average of $4.03 billion per day. This was the fourth consecutive week the Fed's daily purchase average has fallen. Because the Federal Reserve has been the primary source of liquidity to originators looking to sell their loans in the secondary mortgage market, the falling purchase average implies that activity in the mortgage market continues to slow.

Here is a chart illustrating the evolution of the Federal Reserve's Agency MBS Purchase Program. The Fed's weekly purchases have been steadily falling since late March.

All Content Copyright © 2003 – 2009 Brown House Media, Inc. All Rights Reserved.nReproduction in any form without permission of MortgageNewsDaily.com is prohibited.

About the Author

devteam

Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, is a PASBA member accountant located in Londonderry, New Hampshire.

See all blogs
Share

Comments

Leave a Comment

Leave a Reply

Latest Articles

Real Estate Investors Skip Paying Loans While Raising Billions

By John Gittelsohn August 24, 2020, 4:00 AM PDT Some of the largest real estate investors are walking away from Read More...

Late-Stage Delinquencies are Surging

Aug 21 2020, 11:59AM Like the report from Black Knight earlier today, the second quarter National Delinquency Survey from the Read More...

Published by the Federal Reserve Bank of San Francisco

It was recently published by the Federal Reserve Bank of San Francisco, which is about as official as you can Read More...