Fannie Mae, Freddie Mac Bailout Near
September 6th, 2008 | by admin |A government shakeup of Fannie Mae (FNM - Cramer’s Take - Stockpickr) and Freddie Mac (FRE - Cramer’s Take - Stockpickr) could come as soon as this weekend, The Wall Street Journal reported on late Friday.
High-level talks between Federal Reserve Chairman Ben Bernanke, Treasury Secretary Henry Paulson, Fannie Mae CEO Daniel Mudd, Freddie Mac CEO Richard Syron and the companies’ new regulator, the Federal Housing Finance Agency were planned for Friday, the Journal said.
While the Journal did not disclose details of the plan in its report after the market’s close, it said it would involve use of Treasury’s new powers to inject capital in the companies, approved by Congress earlier this year. It also would include changes to management at both companies. Fannie Mae last month shuffled three top executives, but not Mudd.
Shares of the two government-sponsored mortgage giants have been volatile in trading over the past few months, as traders reacted to rumors and speculation over whether or not a government bailout was imminent — a development that would likely wipe out shareholders.
Fannie Mae shares closed up 9.7% to $7.04 Friday, while Freddie Mac shares finished up 3% to $5.10.
