Rep. Frank Confirms Government Interventionby Tim Manni
Rep. Barney Frank (D., Mass) confirmed the Treasury Department is planning a government intervention of GSEs Fannie Mae and Freddie Mac. From the Wall Street Journal as of 3:52 pm:
Rep. Barney Frank (D., Mass.) confirmed that Treasury Secretary Henry Paulson is planning government intervention to back troubled mortgage giants Fannie Mae and Freddie Mac.
The chairman of the House Financial Services Committee said in a statement Saturday that Mr. Paulson “intends to use the powers that Congress provided it” in a law passed in July to keep Fannie Mae and Freddie Mac stable and functioning. But Mr. Frank said he didn’t “know the details of the proposed interventions,” and a Treasury spokeswoman declined to comment.
The Treasury Department is putting the finishing touches on a plan designed to shore up the companies, according to people familiar with the matter, a move that would essentially result in a government takeover of the mortgage giants.
The plan is expected to involve putting the two companies into the conservatorship of their regulator, the Federal Housing Finance Agency, said several people familiar with the matter. That would mean the government would take the reins of the companies, at least temporarily.
We’ll keep you posted on the latest details.