Released: September 07, 2008

Mortgage giants in government takeover

Source: Stephanie Armour, USA Today

Federal officials said Sunday that they will take control of beleaguered mortgage giants Fannie Mae and Freddie Mac in the government’s most aggressive move to stabilize a financial industry reeling from a year-old mortgage and credit crisis.

The two companies own or guarantee nearly half of the $12 trillion in U.S. mortgages, but investors’ confidence has been shaken by their losses amid rising mortgage delinquencies nationally. In the past year, their share prices have fallen about 90%.

Fannie and Freddie will be placed in a government conservatorship that will assume the powers of their boards and management, said James Lockhart, head of the Federal Housing Finance Agency, which regulates Fannie and Freddie.

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