who does the quality check when FED buys $ 2 Trillion Mortgage backed securities

Who does the quality check when FED buys $ 2 Trillion Mortgage backed securities



The world's market seem pleased with Fed buying more and assets off the market ...

Lets take the often quoted "...$2 trillion of mortgage-backed securities and U.S. Treasuries .." that FED bought over the last 15 or so months, with the aim of pushing down borrowing costs and boost the economy.

While the objectives may be noble, who does the quality check of the mortgage backed securities the FED is buying ?

I do not understand the intricacies of this process well and here are my questions ....

- Is there a chance that the FED is buying some bad paper along with good ?

- Is there a chance that IF the housing market takes another 3 ... 4 years to pick up, the FED would be left holding bad assets ?

- Who does the screening ?


Thanks in advance for your answers