Finance

Mortgage bankers warn Fed purchases of mortgages unbalanced market, forcing margin calls

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Federal Reserve Chair Jerome Powell holds a news conference following the Federal Open Market Committee meeting in Washington, December 11, 2019.

Joshua Roberts | Reuters

The Mortgage Bankers Association in a dire letter to regulators Sunday warned that the U.S. housing market is “in danger of large-scale disruption,” due to efforts by the Federal Reserve that were intended to help rescue the mortgage market.

At issue are the Fed’s unprecedented $183 billion of purchases last week of mortgage-backed securities. The purchases were meant to drive down rates, and they did.

But together with the storm that gripped financial markets from the coronavirus, they also effectively blew up a widespread…



Source cnbc.com

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