Posted on September 8, 2008 by Daniel O'Rielly

Treasury Details its Fannie/Freddie Conservatorship

Less than two months after receiving congressional authority for increased control over Fannie Mae and Freddie Mac, the Treasury Department today released details about its plan to place Fannie and Freddie under federal government conservatorship. 

The Treasury Department's fact sheet includes information related to the appointment of James Lockhart, Director of the newly-created Federal Housing Finance Agency ("FHFA"), as conservator for Fannie and Freddie for an indefinite duration.  FHFA also issued a statement about the plan.

In addition to the appointment of a conservator, the Treasury plan has four parts: (1) Fannie and Freddie will "modestly increase" their mortgage-backed securities portfolios through the end of 2009; (2) Treasury and FHFA have entered Preferred Stock Purchase Agreements for Fannie and Freddie stock; (3) Treasury will establish a new secured lending credit facility, which will be available to Fannie Mae, Freddie Mac, and the Federal Home Loan Banks; and (4) Treasury is initiating a temporary program to purchase Fannie and Freddie mortgage-backed securities.

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