Borsa Financial: Fed Assets Difficult To Sell…

Italy, Rome - - Borsa Financial: The US Federal reserve may well be considering the timely withdrawal of stimulus from the economy but, before removing the punch bowl from the party, they may want to assess just how easy it will be to sell the trillion dollars-worth of mortgage backed securities they purchased from nationalized mortgage originators Freddie Mac & Fannie Mae in their attempt to keep mortgage rates artificially low.

Sources close to "Borsa Financial" believe that the assets will be difficult to sell back into a market that is all too aware that the housing market in the world's biggest economy is still suffering at the hands of continuing foreclosures, high unemployment amongst borrowers and sheer over-supply.

This simply means that the properties which act as collateral for the loans packaged into these mortgage-backed securities are still losing value making it unlikely that anyone buying them will be able to recoup capital from the forced sale of a property should a borrower default.

"Borsa Financial" analysts suggest that the Federal Reserve may have hold these assets on its balance sheet for several years until US housing prices bottom, unsold inventory has declined and foreclosures are largely ended.