Officials announce takeover of mortgage giants
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Source: AP
The temporary federal takeover of Freddie Mac and Fannie Mae could cost taxpayers tens of billions of dollars.
But Treasury Secretary Henry Paulson says if the two mortgage powerhouses had been allowed to fail, it would have been tougher for Americans to get loans and other credit, and the cost to the economy would have been far greater.
President Bush says the historic takeover was required because the risk of letting the two firms collapse was "unacceptable," with credit and housing already in crisis.
The Treasury Department says it's prepared to put up as much as 100 billion dollars over time in each of the companies if need be to keep them from going broke. In exchange, the government gets ownership stakes and 2 billion dollars of preferred stock, paying 10-percent interest.
Together, Freddie Mac and Fannie Mae own or guarantee about half the nation's home loans.
