The Mortgage Applications index dropped to its lowest point in 8 years at the end of October. As of the week ended November 21 it had barely budged off that level. The bailout of Fannie and Freddie last summer had the opposite effect of what was hoped for, as spreads on Fannie and Freddie paper widened dramatically versus Treasuries, pushing mortgage rates higher. I have warned in the Fed Report for several years that when the foreign central banks ended their subsidies for GSE paper, it would have a catastrophic impact on the US housing market. It has, and now the Fed has been forced to step in to the breach. Click here to download complete report in pdf format (Professional Edition Subscribers). Try the Professional Edition risk free for thirty days. If, within that time, you don’t find the information useful, I will give you a full refund. It’s that simple. Click here for more information.