Aren't they governmenet sponsored corporations? I know they were created by the Fed governement in the 60s to help increase the number of mortgages available in order to increase home ownership.
This is really bad news because they don't purchase sub prime mortgages. This is a sign of the regular/non sub prime industry failing. NOT good news for our economy at all.
Here you can get a half mortgage, where either your local council or your building society buy the other half of the house. The only problem is, when you sell not many people will want to buy half a house, or if you decide to buy the other half the value may of increased to an amount you cannot afford. If you get into trouble with your mortgage you can do a similar thing as well.
They were poorly run, and their stock was really devalued. So their shareholders are taking a hit. The takeover happened this weekend. And yes, another example of things government does not do well - in conservatorship it will get better, because of the excesses that were allowed in the first place!
Fed to take over Fannie and Freddie
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