Fed’s Mortgage Bond Rescue Could Put Some Lenders Out of Business

Bankrate.com, Apr. 9, 2020–James Royal
The Federal Reserve has begun purchasing hundreds of billions of dollars in bonds, including mortgage-backed securities (MBS), to help shore up debt markets. While the move has helped create liquidity in the market, it’s also had the unintended effect of creating more volatility in interest rates. Despite the Fed’s intentions, the net effect is that some lenders are now facing severe disruption, including potentially bankruptcy, if the market doesn’t settle down. (MBA mention)