Fannie Mae and Freddie Mac, the two largest U.S. mortgage lenders, have been bailed out by the U.S. government.

Henry “Hank” Paulson, US treasury Secretary, rescued Fannie Mae and Freddie Mac to prevent the collapse of the housing market and its consequential recession.

Fannie Mac and Freddie Mac overestimated their capitals in reserve to cover mortgage liabilities. Fannie Mae is the oldest mortgage firm set up by the Federal National Mortgage Association. Fannie Mae was established in 1938 under Franklin Roosevelt’s New Deal for blue collar workers.

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This entry was posted on Monday, September 8th, 2008 at 7:38 am and is filed under News.