Sun, Mar 14, 2010

KEY Weather

Santa Barbara 63.0 °

San Luis Obispo 63.0 °

More Weather

KEY News TipLine

Tools

Government Takes Over Fannie Mae and Freddie Mac

Mike Waller

Story Created: Sep 7, 2008 at 11:09 AM PDT

Story Updated: Sep 8, 2008 at 5:36 PM PDT

WASHINGTON (AP) - The government takeover of mortgage giants
Freddie Mac and Fannie Mae, which was confirmed today, could cost
taxpayers tens of billions of dollars.

But Treasury Secretary Henry Paulson says the cost could have
been far greater if either of them had been allowed to fail. He
says that would have affected the ability of Americans to get home
and auto loans, and other credit.

The Bush administration's move puts both agencies into a
government conservator-ship that will be run by the Federal Housing
Finance Agency.

Officials say the executives and board of directors of both
institutions have been replaced. Former Merrill Lynch vice chairman
Herb Allison will head Fannie Mae, and former US Bancorp vice
chairman David Moffett was picked to head Freddie Mac.

Paulson says it will be up to Congress and the next president to
decide what the two companies will ultimately look like.

The companies own or guarantee about five trillion dollars in
home loans. That's about half of the nation's total.

Next article State Street Beating

Most Popular

This content requires the latest Adobe Flash Player and a browser with JavaScript enabled. Click here for a free download of the latest Adobe Flash Player.