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United States federal government has decided to extend its mortgage aid despite improving consumer sentiment, the Mortgage Bankers Association (MBA) said.
In a joint announcement with the US Treasury, the federal government said it would extend its Term Asset-Backed Securities Loan Facility – known as the TALF – through to the end of June 2010.
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The TALF had been due to expire at the end of December.
The decision to extend the TALF, which is seen as a key to stimulating bank lending to the mortgage markets, is an attempt to ensure that consumer spending, which accounts for approximately 70 per cent of US economic activity, does not begin to decline in the face of rising unemployment.
In a statement from the MBA, the association said it applauded the decision to extend the TALF program.
“We strongly endorse the announcement by the Federal Reserve to extend the program in order to promote financial stability and to enhance liquidity in the market,” the statement read.
