After saying they wouldn't be taking this step late last week, Paulson announced today, on a Sunday no less, that the Treasury will be taking steps to shore up Fannie Mae and Freddie Mac.
I knew it. From the MSNBC writeup:
Secretary Henry Paulson said the government is planning to expand its current line of credit to the two companies should they need to tap it and Treasury could buy equity captial in the companies — if needed. The moves will require congressional approval.
The Federal Reserve saids in a separate statement that it will lend to Fannie Mae and Freddie Mac if they need additional funds.
The plans also seek a “consultative role” for the Federal Reserve in any new regulatory framework eventually decided by Congress for Fannie and Freddie. The Fed’s role would be to weigh in on setting capital requirements for the companies.
Fannie Mae and Freddie Mac either hold or back $5.3 trillion of mortgage debt. That’s about half the outstanding mortgages in the United States.
But helping the home owners isn't an option. Fuckers...
