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Paulson statement on Freddie and Fannie

By
Services for Real Estate Pros with Del Val Realty & Property Management RM422578

Three point Plan to save these two mortgage giants...

First, as a liquidity backstop, the plan includes a temporary increase in the line of credit the GSEs have with Treasury. Treasury would determine the terms and conditions for accessing the line of credit and the amount to be drawn.

Second, to ensure the GSEs have access to sufficient capital to continue to serve their mission, the plan includes temporary authority for Treasury to purchase equity in either of the two GSEs if needed.  Use of either the line of credit or the equity investment would carry terms and conditions necessary to protect the taxpayer.

Third, to protect the financial system from systemic risk going forward, the plan strengthens the GSE regulatory reform legislation currently moving through Congress by giving the Federal Reserve a consultative role in the new GSE regulator's process for setting capital requirements and other prudential standards.

Boy what a week - does any wonder what all this power the Federal Reserve has grab this week - now they oversee all the investment banks and Fannie and Freddie - all this new power in  the last 7 days

Mike Lautensack

 

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