Illya Gerasymchuk
Entrepreneur / Engineer
Ginnie & Fannie Mae conservatorship in Sept 2008 made agency MBS default risk free
essentially, the US Treasury covers all losses from GNMA and FNMA up to $200 billion each
from the total $400B budget ≈$170B are still available
once exhausted it will surely be increased
to lower the mortgage rates the Fed can purchase agency MBS - likely they did in QE 1 2008
buying mortgage backed securities raises their price and provides liquidity for dealers. this directly pushes down the yields
expect some MBS QE to come in the near future
