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Feds expected to take over mortgage giants
The federal government is expected to take over Freddie Mac and Fannie Mae sometime this weekend.
(Bay News 9) -- The federal government is taking over embattled mortgage lenders Fannie Mae and Freddie Mac as soon as this weekend.
The deal is expected to include the departures of the CEOs of both organizations.
Fannie Mae and Freddie Mac are the biggest backers of mortgages in the nation, but between April and June, they lost more than $3 billion this year. Half of those losses were the result of risky loans that left the borrower with escalating payments.
Top regulators, including Fed Chairman Ben Bernanke and Treasury Secretary Henry Paulson, met with the lender's top executives Friday to inform them of the government's takeover process, which is known as conservatorship.
Critics of an open-ended rescue plan which was passed by Congress said the bailout could expose taxpayers to billions of dollars in potential losses.
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