Officials announce takeover of mortgage giants

[QUESTINY]

Officials announce takeover of mortgage giants
Sunday September 7, 12:34 pm ET
By Alan Zibel and Martin Crutsinger, AP Business Writers
Government assumes control over mortgage giants Fannie Mae and Freddie Mac

WASHINGTON (AP) -- The Bush administration, acting to avert the potential for major financial turmoil, announced Sunday that the federal government was taking control of mortgage giants Fannie Mae and Freddie Mac.

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Officials announced that the executives and board of directors of both institutions had been replaced. Herb Allison, a former vice chairman of Merrill Lynch, was selected to head Fannie Mae, and David Moffett, a former vice chairman of US Bancorp, was picked to head Freddie Mac.

Treasury Secretary Henry Paulson says the historic actions were being taken because "Fannie Mae and Freddie Mac are so large and so interwoven in our financial system that a failure of either of them would cause great turmoil in our financial markets here at home and around the globe."

The huge potential liabilities facing each company, as a result of soaring mortgage defaults, could cost taxpayers tens of billions of dollars, but Paulson stressed that the financial impacts if the two companies had been allowed to fail would be far more serious.

"A failure would affect the ability of Americans to get home loans, auto loans and other consumer credit and business finance," Paulson said.

Both companies were placed into a government conservatorship that will be run by the Federal Housing Finance Agency, the new agency created by Congress this summer to regulate Fannie and Freddie.

The Federal Reserve and other federal banking regulators said in a joint statement Sunday that "a limited number of smaller institutions" have significant holdings of common or preferred stock shares in Fannie and Freddie, and that regulators were "prepared to work with these institutions to develop capital-restoration plans."

The two companies had nearly $36 billion in preferred shares outstanding as of June 30, according to filings with the Securities and Exchange Commission.

Paulson said that it would be up to Congress and the next president to figure out the two companies' ultimate structure.

"There is a consensus today ... that they cannot continue in their current form," he said.

Paulson and James Lockhart, director of the Federal Housing Finance Agency, stressed that their actions were designed to strengthen the role of the two mortgage giants in supporting the nation's housing market. Both companies do that by buying mortgage loans from banks and packaging those loans into securities that they either hold or sell to U.S. and foreign investors.

The companies own or guarantee about $5 trillion in home loans, about half the nation's total.

Lockhart said that both Fannie and Freddie would be allowed to increase the size of their holdings of mortgage-backed securities to bolster the housing industry as it undergoes its worst downturn in decades.

Lockhart said in order to conserve about $2 billion in capital the dividend payments on both common and preferred stock would be eliminated. He said that all lobbying activities of both companies would stop immediately. Both companies over the years made extensive efforts to lobby members of Congress in an effort to keep the benefits they enjoyed as government-sponsored enterprises.

Both Paulson and Lockhart were careful not to blame Daniel Mudd, the CEO of Fannie Mae, or Freddie Mac CEO Richard Syron for the companies' current problems. While both men are being removed as the top executives, they have been asked to remain for an unspecified period to help with the transition.

http://biz.yahoo.com/ap/080907/mortg...ts_crisis.html

[Cookie]

When I read this article this morning... I felt like I was being choked....

[Peace4Gaia]

My only question is - when will SallieMae follow suit?

People are being forced into lifetimes of financial indentured servitude for having had the gall to try and obtain an education in this country... once ensnared, and thanks to new bankruptcy laws, there is no possible relief short of long-term disability or death. No consideration for any unique circumstances. No opportunity to refinance, no way to even speak to an actual human being in person to find some resolution. And this is the ONLY type of debt that can NEVER be discharged in bankruptcy. There is simply no relief and no possible escape.

This will be my fate too if nothing changes, as things stand, I will spend the rest of my life paying off student loans. Our whole economic system cannot continue as it has been. I say let it crumble!!! The sooner the better!!!

[steverocks85]

when i saw this headline i almost fell off my chair!

to the united states of bankers

[QUESTINY]

Originally Posted by steverocks85

when i saw this headline i almost fell off my chair!

to the united states of bankers

Nationalizing!!! The American People pay for it with tax dollars. It's not the United States, welcome to the Communist States of Washington DC.

Hello Bill, Kerry and group. I have been a long time follower and have pretty much viewed all of the video interviews and have just finished listening to your September 6th interview with Benjamin Fulford. He pretty much goes over the article he wrote August 28th at Rense.com. You also posted a short piece about September 8th through an aborted interview you had with him earlier.

As you probably know, the US Government nationalized Freddie Mac/Fannie Mae over the weekend and the world's stockmarkets rejoiced like it was Christmas.

Do you think Fulford knew the possibility of this, being the economist he is?

He didn't seem to think so, not about the 8th anyway and we still have a couple of weeks until the 30th. But it looks like the neonazis, or some faction could be bought, with Japanese gold by the looks of it, since I can't see these mortgage companies being propped up with fiat currency for long.

I have questioned Fulford's credibility in the past, especially about the Asian assassination groups and his family ties with the Rockefellers. But it looks like he might have had some insider knowledge on this, so I'm willing to listen further and give him a pass.

I posted about this on my blog:
http://dad2059.wordpress.com/2008/09...e-it-happened/

I will agree that we live in very perilous times and hope beyond hope that we can weather this storm.

Peace.

[Mizar]

Questiny;
Another great post,
National Debt doubles in a weekend, and don't forget that many large institutions and Mutual funds held Fannie and Freddie, and now all those $ have evaporated like water on a hot skillet. We have got about four weeks until all these other giants report their losses.
FDIC could be next, as there may be no more slop in the trough after this, it has got to end somewhere.
11 down, 206 to go.
M

[Zarathustra]

The banking cartel is not even attempting to rob the people under the cover of darkness any longer.