Taxpayers, we love you!

 

 

After much speculation, the US Federal government has taken over control of Fannie Mae and Freddie Mac, the beleaguered private mortgage lending giants, which is the largest ever takeover of a financial institution in US history. The two companies have disbursed about $5 trillion in home loans together, and this happens to be around half of the total US home loan disbursements. The two housing giants will now be under the conservatorship of the treasury department. This means that the treasury department will provide as much money as the two require to cover any losses and to finance further mortgages during the conservatorship. This will cost taxpayers between 25 and 50 billion dollars! But prospective buyers, who are looking for home loans, will heave a sigh of relief. However, most analysts believe that this might not be enough to revive the housing slump.