$1.25 Trillion in MBS purchases by the end of March 2010, however many think that this program will have to be extended. Im sure many of these officials are extremely worried about whats going to happen when they stop buying these securities and rates start to skyrocket because again they stepped in to prop everything up. Housing has been propped up by historical low rates, incentives and huge tax credits, they cannot continue to expand these programs, everyone is so used to seeing rates at historical lows that once they start to rise consumers will stay put and wait for rates to come back down, of course since these mortgage rates were pushed lower it might take years before you see 4-5% 30 yr fixed rates once again. Take away the programs, take away the $8000 tax credit, take away foreclosure programs and watch housing prices fall another 25% where they should be. Enough already. * JANUARY 7, 2010 Mortgage Program Splits Fed Officials By JON HILSENRATH [U.S. Federal Reserve] Bloomberg News /Landov U.S. Federal Reserve Federal Reserve officials squabbled about how to proceed with a program of mortgage-backed-securities purchases at their December meeting, with some saying a weak economy could warrant expansion and at least one arguing for scaling back, according to minutes of the meeting released Wednesday. The minutes show some officials worried the housing recovery could be cut short next year when the Fed stops buying mortgage debt and when other federal support programs -- such as a government housing tax credit -- expire. More The Fed is on track to purchase $1.25 trillion of mortgage-backed securities, and has said it plans to complete the purchases by the end of March. The purchases have helped to drive down mortgage interest rates, providing an important boost to U.S. housing and financial markets. When the Fed stops buying, mortgage rates could turn higher. "Some participants remained concerned about the economy's ability to generate a self-sustaining recovery without government support," the minutes of the Dec. 15-16 meeting said. Some officials argued the Fed might need to expand its mortgage-purchase program and extend it beyond the first quarter to keep the recovery going. At least one Fed official argued the program should be scaled back because the economy is improving. Officials are likely to continue to debate this and other issues in coming months, as they keep short-term bank lending rates, their main lever for managing the economy, near zero. "It goes without saying, if this recovery fails for whatever reason, yeah, they'll ramp up asset purchases," said Alan Levenson, chief fixed-income economist at T. Rowe Price in Baltimore. "They want to keep their options open." The minutes reported that Fed staff economists "modestly" revised their growth forecast upward for 2010 and 2011, noting "better-than-expected data on employment, consumer spending, home sales, and industrial production." Even though the economy is expected to grow slightly faster than its long-run average, Fed officials don't expect it to grow fast enough to bring down unemployment very quickly. They noted in December that the recovery was "gaining momentum," a slightly more upbeat assessment than they offered in a statement issued immediately after the meeting.