In a sweeping intervention, USA government is going to put troubled housing finance companies Fannie Mae and Freddie Mac, under government control , after concluding the companies don't have enough capital to continue to play their crucial role funding home mortgages.
Under the plan, engineered by Treasury Secretary Henry M. Paulson Jr., the government would place the two companies under "conservatorship," a legal status akin to Chapter 11 bankruptcy. Their boards and chief executives would be fired and a government agency, the Federal Housing Finance Agency, would appoint new chief executives.
The moves by the Bush administration hold the prospect of becoming the biggest government-funded bailout of private industry in American history. They would put the federal government in control of institutions that finance or guarantee about half of all the mortgages in the country.
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