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The Rescue Of Fannie Mae And Freddie Mac–Module F: Federal Reserve’S Large-Scale Asset Purchase (Lsap) Program, Daniel Thompson, Adam Kulam
The Rescue Of Fannie Mae And Freddie Mac–Module F: Federal Reserve’S Large-Scale Asset Purchase (Lsap) Program, Daniel Thompson, Adam Kulam
Journal of Financial Crises
By late 2008, the secondary mortgage markets were suffering high default rates, causing mortgage lending to slow and the value of mortgage securities to plummet. The Federal Reserve lowered the federal funds rate, and the government placed Fannie Mae and Freddie Mac into conservatorship, yet credit in housing and other financial markets remained tight. On November 25, the Fed announced its intent to purchase up to $500 billion in agency mortgage-backed securities (MBS) and $100 billion in agency debt to reduce the cost and increase the availability of mortgage credit, which would support housing markets and improve conditions in financial …