FHLBs to Buy More MBSs from Members To Boost Liquidity

Published March 28, 2008, 2:08 p.m. EDT

Updated August 27, 2020, 1:19 a.m. EDT

1 Min Read

WASHINGTON - The Federal Housing Finance Board (FHFB) announced it will allow Federal Home Loan Banks (FHLB) to buy more mortgage-backed securities (MBS) from its members as part of the latest effort to add liquidity to the troubled mortgage market.

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As a result, the 12 regional FHLBs can buy up to $100 billion over the next two years in MBSs backed by one of the two main government sponsored enterprises (GSEs), Fannie Mae or Freddie Mac.

The individual banks can buy up to 600% of their capital in GSE-backed MBSs, up from the current 300%. (c) 2008 The Credit Union Journal and SourceMedia, Inc. All Rights Reserved. http://www.cujournal.com http://www.sourcemedia.com

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