Will Operation Twist Encourage Risky Mortgages?

By now, you've probably already heard about the Federal Reserve's "Operation Twist." That's the program through which the central bank hopes to push down longer-term interest rates. But in their September meeting they announced another policy changes that is arguably just as important. The Fed will begin reinvesting the maturing principal from their mortgage securities in new government-backed mortgage-backed securities. This could have a very significant effect on the housing market -- but not all good.