buyers of mortgage bonds

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Submitted by wannabe2077 on June 2, 2009 - 9:15pm

I want to know who wants to buy mortgage bonds at 5% with 30 year maturity.

It looks to me for real estate transactions in this country that there needs to be a buyer of mortgage bond. Very few banks hold the mortgage in their portfolio.

5% 30 year for an asset from which people can walk away does not seem too attractive to me. Maybe at 8% I would be willing to risk my money

Given this logic won't home prices fall further ?

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No, cause the only real game
Submitted by DWCAP on June 2, 2009 - 9:44pm.

No, cause the only real game in town now is the federal government through either:
A) Fannie
B) Freddie
C) FHA

They dont care about their return on investment, it isnt their investment (it is the taxpayers). They care about being re-elected and generating the necessary campaign donations to be re-elected. Both come from proping up the morgage market with taxpayer money, and dont come from getting a real, balanced return (when considering the crazy times we are in).

Without the GSE bailout prices would have fallen apart as new lending dried up.