Feds Move to Provide Financial Help for Fannie and Freddie
WASHINGTON -- The Bush administration asked Congress for the authority to lend money to and buy shares in Fannie Mae and Freddie Mac, should those mortgage buyers need the additional capital.
In a rare Sunday appearance outside the Treasury Department's offices, Treasury Secretary Henry S. Paulson announced the measures, which he said would help the two companies continue in their current role "as we work through the current housing correction."
The proposals will be included in the housing bill currently working through Congress. Separately, Fannie and Freddie will be allowed to borrow directly from the Federal Reserve as a result of a decision made by that agency on Sunday.
Fannie and Freddie, which are government sponsored enterprises have lost more than $11 billion in the nine months ending March 31. They own or guarantee $5.2 trillion worth of home mortgages, about half of all outstanding loans.
NAFCU President Fred Becker praised Paulson's announcement and said it demonstrated the government's recognition of the important role those enterprises play in the mortgage business.
"NAFCU and the credit union community have a vital interest in the preservation of a viable secondary mortgage market," he said in a statement.