Sma' Talk Wi' T

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US Government Take Over Fannie Mae & Freddie Mac

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The two mortgage behemoths have gotten too big for their britches.

Falling home prices, which are expected to lead to more defaults among the mortgages held or guaranteed by Fannie and Freddie, contributed to the urgency, regulators said.

The details of the deal have not fully emerged, but it appears that investors who own the companies’ common stock will be virtually wiped out; preferred shareholders, who have priority over other shareholders, may also end up with little. Holders of debt, including many foreign central banks, are expected to receive government backing. Top executives of both companies will be pushed out, according to those briefed on the plan.

Countrywide Scandal and Obama Advisor Resigns

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Written by smalltalkwitht

September 7, 2008 at 11:46 am

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