Federal Reserve to bail out housing, help consumer loans

While the White House has argued against any further loans to American automakers, the Federal Reserve has announced a new plan to buy nearly a trillion dollars of debt and securities. The plan includes $600 billion for mortgage related debt and securities, bailing out irresponsible lenders, and $200 billion for consumer debt including auto loans.  $100 billion of the mortgage debt would be dedicated to Fannie Mae, Freddie Mac, and Federal Home Loan banks; the remainder would be dedicated to securities backed by Fannie Mae, Freddie Mac, and Ginnie Mae. The primary impetus, according to Reuters, is to rescue the housing market. 

The $200 billion in consumer debt will be split between car loans, student loans, credit card debt, and small business loans guaranteed by the Small Business Administration. 

Both plans are being implemented using authority granted in 2008′s Emergency Economic Stabilization Act. Detailed terms were released to the media and are available via the Treasury web site.

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