Feds Take Over Fannie Mae and Freddie Mac

Well, it's official. The US government took over Fannie Mae and Freddie Mac in an attempt to calm worldwide lending jitters. The organizations are now under conservatorship of the Federal Housing Finance Agency (FHFA).

The Feds determined that Fannie and Freddie would not be able to withstand expected mortgage defaults, so they pledged government dollars to fill any void. We won't know the outcome of this action until all the dust settles, but this is probably one for the history books.

The takeover process was long and detailed. However it ended bluntly and quickly. According to the Freddie Mac's chief executive Richard Syron, Treasury Secretary Henry Paulson said, "Accept or it will happen".

Further reading:

• WSJ on Takeover Process
• FHFA Conservatorship FAQ