Treasury To Bail Out Fannie & Freddie?by Tim Manni
Various news outlets have published stories this evening that claim the Treasury Department is close to a deal with mortgage giants Fannie Mae and Freddie Mac. From The Wall Street Journal:
WASHINGTON — The Treasury Department is putting the finishing touches to a plan designed to shore up Fannie Mae and Freddie Mac, 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.
It is also expected to involve the government injecting capital into Fannie and Freddie. That could happen gradually on a quarter-by-quarter basis, rather than in a single move, one person familiar with the matter said.
We’ll keep you posted on any new developments.