The Real Deal Miami

Fed Rescue for Fannie and Freddie

July 14, 2008 07:55AM

The government said it would help mortgage finance giants Fannie Mae and Freddie Mac ward off collapse as investor drive their shares down to a fraction of their value a year ago. The Federal Reserve and the Treasury unveiled plans on Sunday to reassure investors and lend money at favorable rates should the two companies – which own or guarantee about $6 trillion in U.S. mortgage debt – require capital. Secretary Henry Paulson said the Treasury seeks fast-track Congressional approval to expand its current $2.25 billion line of credit to each company should they need to tap it and to make an equity investment in the companies if required.