US Treasury Renegotiates Fannie and Freddie Agreement

The U.S. Treasury Department will revamp the terms of its nearly four-year-old financial backing of Fannie Mae and Freddie Mac in a bid to allay investor concerns that the companies could one day exhaust their federal lifelines.

The renegotiated agreements, announced Friday, will change the way the firms pay the government and are designed to ensure that that Fannie and Freddie aren’t revived as private companies.

“We are taking the next step toward responsibly winding down Fannie Mae and Freddie Mac, while continuing to support the necessary process of repair and recovery in the housing market,” said Michael Stegman, a Treasury official overseeing housing finance policy “We are committed to putting in place measures right now that support continued access to mortgage credit for American families, promote a responsible transition and protect taxpayer interests.”

via Marketwatch

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