- The regulator of Fannie Mae and Freddie mach, the Federal Housing Finance agency, will manage the two government sponsored enterprises on a “temporary basis” under conservatorship arrangements.
- Full details here.
- Herb Allison to be new CEO of Fannie, David Moffett CEO of Freddie
- Conservatorship aims to “preserve and conserve”‘ the companies’ assets and property “in a sound and solvent condition,” with “no exact time frame'’ for when the conservatorship will end.
- Preferred stock purchase agreements to insure each GSE retains positive net worth
- US Treasury establishing secured lending credit facility for Fannie, Freddie, Home Loan Banks
- US Treasury to buy Fannie, Freddie MBS under temporary program * Herb Allison to be new CEO of Fannie, David Moffett CEO of Freddie
- Paulson:
We have determined that it is necessary to take action…Our economy and our markets will not recover until the bulk of this housing correction is behind us. Fannie Mae and Freddie Mac are critical to turning the corner on housing.
- Bernanke:
I strongly endorse both the decision by FHFA Director Lockhart to place Fannie Mae and Freddie Mac into conservatorship and the actions taken by Treasury Secretary Paulson to ensure the financial soundness of those two companies. These necessary steps will help to strengthen the U.S. housing market and promote stability in our financial markets. I also welcome the introduction of the Treasury’s new purchase facility for mortgage-backed securities, which will provide critical support for mortgage markets in this period of unusual credit-market uncertainty.
- James Lockhart of the FHF:
(Fannie and Freddie) cannot continue to operate safely and soundly and fulfill their critical public mission without significant action to address our concerns.
Paulson Engineers U.S. Government Takeover of Fannie, Freddie - Bloomberg
