Dollars and Jens
Sunday, September 07, 2008
Fannie and Freddie
Federal officials unveiled an extraordinary takeover on Sunday of troubled mortgage giants Fannie Mae and Freddie Mac, signaling the most dramatic move to date aimed at shoring up the nation's housing market.Dividends on common and preferred equity are suspended, the CEOs are out — I kind of think the most recent CEOs are much less to blame for The Troubles than are their predecessors, but this may well be a good idea even if that's correct — and the boards are dissolved, though the stock (both common and preferred) remains "outstanding". It will be interesting to see where it trades tomorrow.
The plan, which was delivered by Treasury Secretary Henry Paulson and James Lockhart, director of the Office of Federal Housing Enterprise, places the twin mortgage buyers into "conservatorship" to be overseen by the Federal Housing Finance Agency.
