The Treasury Department is considering a plan to force down mortgage
rates and pump up the housing market, sources told the Washington Post.
The Treasury would buy securities that finance home loans, but mortgage
lenders would have to set very low rates on 30-year fixed-rate
mortgages, no higher than 4.5 percent, to qualify for the Treasury
program. Most of those securities would be purchased from Fannie Mae
and Freddie Mac, the sources said. It is unclear how the plan would be
funded or how much it would cost to implement. The Federal Reserve has already announced a plan
to buy mortgage-backed assets from Fannie Mae and Freddie Mac.