Industry NewsMortgage

Fed plan seen as housing boon

$600 billion spending plan should help interest rates

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Anyone planning to buy or refinance a home with a conforming loan is soon likely to have more buying power thanks to a $600 billion government program to purchase mortgage-backed securities and debt issued by Fannie Mae, Freddie Mac and Ginnie Mae. The plan should keep interest rates on loans eligible for purchase by Fannie and Freddie down, even if the demand for mortgage-backed securities weakens with the slowdown in the global economy. That, in turn, should provide support for housing markets, supporters of the plan said. In another significant development for borrowers, Freddie Mac said it's eliminating upfront fees charged to lenders for fixed-rate purchase loans and no-cash-out refinancings for "super conforming" mortgages above the $417,000 conforming loan limit. Because Fannie and Freddie are competitors, it's common for one to follow the other's lead on fees. The Federal Reserve today said it would buy $100 billion in debt from Fannie Mae, Freddie Mac a...