Mortgage Blog

PA Mortgage borrowers may benefit from Fed stimulus package.

WASHINGTON — The Federal Reserve took its strongest step to date to try to bolster the sluggish U.S. job market, launching a new stimulus program aimed at firing up one of the economy's long-idled engines: the housing market.

The central bank said it would immediately start buying billions of dollars of mortgage-backed securities — essentially bonds that are made up of a bunch of home loans, packaged and then sold to investors.

And in an unexpected move, the Fed left the program open-ended and said it was prepared to do even more "if the outlook for the labor market does not improve substantially."

The Fed's hope is that heavy intervention in the real estate market would push already historically low mortgage rates down further for a longer period, spurring refinancing activity and home sales.

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