U.S. to Support Mortgage Giants; IndyMac To Reopen

U.S. Announces Plan to Support Mortgage Giants, Fannie Mae and Freddie Mac

The United States Treasury and Federal Reserve have announced measures aimed at supporting two huge U.S. mortgage giants whose shares have fallen sharply during the ongoing housing crisis.

Treasury Secretary Henry Paulson said Sunday the treasury is seeking authority to expand its current line of credit to Fannie Mae and Freddie Mac, which hold some $5 trillion in mortgage securities.

Paulson said the strength of the two lenders is important to maintaining confidence and stability in the U.S. financial system.

Separately, one of the biggest banks in the United States, IndyMac, is set to reopen Monday, but it will be under the control of the Federal Deposit Insurance Corporation. The California-based bank, with some $32 billion in assets, closed its doors Friday, leaving depositors wondering what would happen to their money. Officials said depositors who had $100,000 in the bank or less will be fully insured, but those with more are likely to lose money.

The developments come at a time of economic turmoil in the United States.

U.S. consumers say they are worried about high oil prices, falling home values and the declining stock market. A gauge of consumer sentiment showed Americans' view of the economy remains close to the most pessimistic level seen in 28 years.

ENDS

Latest World News | Top World News | World Digest | Archives | RSS

© Scoop Media