The reason for this asset buying or Bail out as it should be called is that banks and the US government are insolvent. The FED is in panic mode as the system is crumbling under their centrally planned manipulated monetary system. The system is on the verge of collapse at any Fiat economic system is.

The reason for buying the Mortgage Backed Securities (MBS) is that people were too indebted and shouldn't have bought the houses in the first place. Debt always becomes a burden when it is over accumulated. It is like a pyramid scheme. You always need more debt to fuel the ever expanding tower debt. At one point the engineering of the ever-expanding tower will fail and the tower becomes like a deck of cards. You can borrow money with interest in smaller amounts, but when everyone starts doing it in a sector or now all sectors there will never be enough "money" in circulation to pay off the Principle and Interest.