The US Treasury Department announced Sunday that it will take control of congressionally-chartered lenders, Fannie Mae and Freddie Mac due to the failure of the agencies to operate effectively on their own. Under the takeover or conservatorship, the Federal Housing Finance Agency will manage the agencies’ loans in an effort to promote the housing and financial markets by preventing bankruptcy filings by the agencies. Congress recently authorized the Treasury Department to help the agencies by purchasing stock or equity lending or by stepping in to control the agencies’ finances. The agencies will be responsible for paying back the government once the temporary takeover expires.
Approximately $5 trillion in mortgage loans in the US are processed through Fannie Mae and Freddie Mac.
Source: http://www.foxnews.com/story/0,2933,418241,00.html
Tags: Fannie Mae, Federal Housing Finance Agency, Freddie Mac, U.S. Treasury Department
