Senior officials from the Bush administration and the Federal Reserve on Friday told executives of Fannie Mae and Freddie Mac that the government was preparing to place them under federal control, according to a report in the New York Times. The plan was outlined in meetings with the chief executives of the two mortgage giants, the New York Times cited executives and Bush administration officials as saying. Under the plan, the two boards would be replaced and shareholders would be virtually wiped out, but that the companies would be able to continue functioning, the report stated.
Seeking to help alleviate the mortgage market crisis, Senator Charles Schumer introduced legislation on Monday that would expand portfolio limits for the housing government sponsored enterprises and allow them to buy larger loans.
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