MBA's Quinn Hails FHFB's Decision to Allow Home Loan Banks to Increase Market Liquidity
Mar 24, 2008
WASHINGTON, D.C. (March 24, 2008) - Kieran P. Quinn, CMB, Chairman of the Mortgage Bankers Association (MBA) applauded today's action by the Federal Housing Finance Board (FHFB) that will temporarily permit the Federal Home Loan Banks to purchase up to six times their capital in Fannie Mae and Freddie Mac mortgage backed securities (MBS). The FHFB estimates this could inject approximately 0 billion in liquidity into the MBS market.
Quinn issued the following statement:
"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. This is something MBA has been advocating since the credit markets seized this past August.
"The lack of investment in mortgage backed securities has exacerbated the credit crunch for families looking to buy homes as well as for existing borrowers looking to refinance into more affordable loans. The Federal Home Loan Bank System was created to stimulate mortgage financing even when credit markets are under duress. I commend the FHFB for helping to jumpstart the secondary market in a safe and sound manner."
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