With Fed stepping out of mortgage market, economists hopeful

The Federal Reserve officially ended its $1.25 trillion program to buy-up mortgage-backed securities, a plan that is widely considered to be the largest individual initiative ever made by the federal government to support the U.S. economy. Market experts say the program kept mortgage rates at epic lows, and Susan Wachter, a professor of real estate and finance at the University of Pennsylvania, said it was instrumental in stabilizing the economy during the recession. “The potential maelstrom of destruction was out there… that was stopped,” Wachter said, adding that she believed the securities buy-up was “the single most important move to stabilize the economy and prevent a debacle.” The program, which was initially slated to cover just $500 billion in mortgage-backed securities purchases when it launched January 2009, has also been praised by Lawrence Yun, the chief economist with the National Association of Realtors, who said he’s not concerned about the market adjusting in the Fed’s wake. “Just as the Fed is stepping out, private investors appear to be stepping in,” Yun said. “As long as there are buyers on Wall Street for mortgages, it should have no impact on consumers.”