Free Republic
Browse · Search
News/Activism
Topics · Post Article

Skip to comments.

Fannie Mae, Freddie Mac to be Put Under Federal Control, Sources Say
washingtonpost.com ^ | September 5, 2008 | David S. Hilzenrath, Neil Irwin, and Zachary A.Goldfarb

Posted on 09/05/2008 6:22:39 PM PDT by John W

The government has formulated a plan to put troubled mortgage giants Fannie Mae and Freddie Mac under federal control, dismiss their top executives, and use government funds to prop them up, government officials told the two companies yesterday, according to sources familiar with the conversations.

Under the plan, the federal government would place the firms in a legal state known as conservatorship, the sources said. The value of the company's common stock would be diluted but not wiped out while the holdings of other securities, including company debt and preferred shares, would be protected by the government.

As the pace of discussions accelerated today, Treasury officials contacted senior congressional leaders, telling them they might be briefed on the plan this weekend and asking for telephone numbers at which they could be reached.

(Excerpt) Read more at washingtonpost.com ...


TOPICS: Breaking News; Business/Economy; Front Page News; Government; News/Current Events
KEYWORDS: bernanke; demron; fanniemae; fed; fnm; fre; freddiemac; govwatch; housingbubble; mortgage; paulson; socialism; treasury
Navigation: use the links below to view more comments.
first 1-2021-4041-6061-8081-91 next last

1 posted on 09/05/2008 6:22:40 PM PDT by John W
[ Post Reply | Private Reply | View Replies]

To: John W

oh my.


2 posted on 09/05/2008 6:23:57 PM PDT by Principled (Vaporize the "Divide and Conquer" taxes - Have everyone pay the same marginal rate!. NRST!)
[ Post Reply | Private Reply | To 1 | View Replies]

To: John W

From bad to worse.

These two government sanctioned ‘franchises’ should not exist. But they shouldn’t be government controlled either.


3 posted on 09/05/2008 6:25:18 PM PDT by Skywalk (Transdimensional Jihad!)
[ Post Reply | Private Reply | To 1 | View Replies]

To: John W; TigerLikesRooster
The government has formulated a plan to put troubled mortgage giants Fannie Mae and Freddie Mac under federal control, dismiss their top executives, and use government funds to prop them up, government officials told the two companies yesterday, according to sources familiar with the conversations.

You know it's Friday night when the Government is seizing control of insolvent financial institutions.

There's just one problem: the Government itself is insolvent, too.

4 posted on 09/05/2008 6:26:20 PM PDT by rabscuttle385 (Life's uncertain. Eat dessert first.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: John W

This means, the “government” [read: taxpayer} will become the ultimate guarantor of every garbage loan every bank has on its’ books. Without limit.

Congratulations, everyone. We own all the banks....or, wait...do I have that backwards?


5 posted on 09/05/2008 6:27:31 PM PDT by Attention Surplus Disorder (Congrasites = Congressional parasites.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: John W

oh lawdy.


6 posted on 09/05/2008 6:27:42 PM PDT by happinesswithoutpeace (You are receiving this broadcast as a dream)
[ Post Reply | Private Reply | To 1 | View Replies]

To: John W

OK, have the “formulated a plan”, or are the executing a plan?

The only thing that suggests the plan might be more than just a plan is that they wanted phone numbers for the weekend.


7 posted on 09/05/2008 6:34:25 PM PDT by CharlesWayneCT
[ Post Reply | Private Reply | To 1 | View Replies]

To: rabscuttle385
You know it's Friday night when the Government is seizing control of insolvent financial institutions.


And wiping out the equity of hundreds of thousands of stockholders.
8 posted on 09/05/2008 6:44:43 PM PDT by Deo volente
[ Post Reply | Private Reply | To 4 | View Replies]

To: John W

http://www.freerepublic.com/focus/f-news/2075763/posts


9 posted on 09/05/2008 6:51:40 PM PDT by Principled (Vaporize the "Divide and Conquer" taxes - Have everyone pay the same marginal rate!. NRST!)
[ Post Reply | Private Reply | To 1 | View Replies]

To: John W
Here's an older thread from 2004 worth tossing into the mix...

Jamie Gorelick's law firm represents Fannie Mae, which cooked books, gave Gorelick big bonus
10 posted on 09/05/2008 6:55:10 PM PDT by SpaceBar
[ Post Reply | Private Reply | To 1 | View Replies]

To: John W

Congratulations...you’ve just been robbed!

Good for all the pigmen bankers who got to dump their trash loans on us taxpayers.


11 posted on 09/05/2008 6:59:31 PM PDT by Thoreau
[ Post Reply | Private Reply | To 1 | View Replies]

To: John W
since the taxpayer is stuck paying for this, firing the management is not good enough for me - anyone that got a bonus check from these failures should be prosecuted - that should have made clear to anyone accepting a job with them

especially raines and gorelick since they cooked the books (raines got fined $2 million but got bonuses in the tens of millions - his insurance paid the fine (but i bet fannie mae paid the insurance premiums))

it may be that congress forced all these bad loans into fannie mae - i am not sure about that - but i recall barney frank wanting to shove bad mortgages into fannie mae - but i bet all the clintonistas did not improve things there

democrats ran these failures - but want to demonize successful big oil - that needs to be made clear to every voter

12 posted on 09/05/2008 7:00:48 PM PDT by sloop (pfc in the quiet civil war)
[ Post Reply | Private Reply | To 1 | View Replies]

To: John W

So who is going to oversee the Conservator??

Senator Chris Dodd, and the Senate Banking Committee??...


13 posted on 09/05/2008 7:04:57 PM PDT by Bean Counter (Stout Hearts.....)
[ Post Reply | Private Reply | To 1 | View Replies]

To: John W
I have been watching this story for 2 weeks because I held options on the stock and to say the least was very concerned; I got out last week at a profit and am sure glad I didn't hold over the weekend.

In this case it's the conservatives who want to put the companies under Fed control temporarily in order to chop them up and then auction them out to private companies; they are way too big now for anyone to buy them as they currently exist. Fannie and Freddy were partially privatized a couple of decades ago but now conservatives want to go all the way.

The liberals (Barney Frank is one who is quite outspoken about it) wants to leave the situation as is but the Gorelick-Raines corruption has convinced conservatives that something must be done in a dramatic fashion since Fannie Mae-Freddie Mac are now holding back real estate recovery.

When I heard that the FDIC chairman under Reagan was advocating that the government move in so that they can ultimately be privatized I felt it was probably going to happen.

14 posted on 09/05/2008 7:05:26 PM PDT by what's up
[ Post Reply | Private Reply | To 1 | View Replies]

To: John W

It’s ......... FDIC Friday!


15 posted on 09/05/2008 7:14:53 PM PDT by ikka
[ Post Reply | Private Reply | To 1 | View Replies]

To: John W
... dismiss their top executives, ...

That's a good first step -- and down go some more Community Organizers from their perches.

16 posted on 09/05/2008 7:39:11 PM PDT by meadsjn (Socialists promote neighbors selling out their neighbors; Free Traitors promote just the opposite.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: ikka
After hours trading has dumped both stocks.

These stocks may be penny stocks at opening bell Monday.

17 posted on 09/05/2008 7:40:43 PM PDT by evad (.!.)
[ Post Reply | Private Reply | To 15 | View Replies]

To: Attention Surplus Disorder
This means, the “government” [read: taxpayer} will become the ultimate guarantor of every garbage loan every bank has on its’ books. Without limit.

Congratulations, everyone. We own all the banks....or, wait...do I have that backwards?

What will happen is the government will get warrants to purchase common shares at a later date and will end up making money on the deal.

18 posted on 09/05/2008 7:47:30 PM PDT by Moonman62 (The issue of whether cheap labor makes America great should have been settled by the Civil War.)
[ Post Reply | Private Reply | To 5 | View Replies]

To: evad
Its already being reported as a done deal on Yahoo headlines.

U.S. to seize mortgage giants

The U.S. government is expected to take control of Fannie Mae and Freddie Mac.

19 posted on 09/05/2008 7:49:58 PM PDT by Orange1998
[ Post Reply | Private Reply | To 17 | View Replies]

To: sloop
it may be that congress forced all these bad loans into fannie mae - i am not sure about that - but i recall barney frank wanting to shove bad mortgages into fannie mae - but i bet all the clintonistas did not improve things there

It was HUD under Andrew Cuomo and to some degree W also pushed home ownership.

20 posted on 09/05/2008 7:53:11 PM PDT by Moonman62 (The issue of whether cheap labor makes America great should have been settled by the Civil War.)
[ Post Reply | Private Reply | To 12 | View Replies]


Navigation: use the links below to view more comments.
first 1-2021-4041-6061-8081-91 next last

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
News/Activism
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson