Federal takeover of Fannie Mae and Freddie Mac Budget and Accounting Transparency Act of 2014

the federal takeover of fannie mae , freddie mac refers placing conservatorship of government-sponsored enterprises fannie mae , freddie mac u.s. treasury in september 2008. 1 of financial events among many in ongoing subprime mortgage crisis.

on september 6, 2008, director of federal housing finance agency (fhfa), james b. lockhart iii, announced decision place 2 government-sponsored enterprises (gses), fannie mae (federal national mortgage association) , freddie mac (federal home loan mortgage corporation), conservatorship run fhfa. united states treasury secretary henry paulson, stated placing 2 gses conservatorship decision supported, , advised conservatorship form in commit taxpayer money gses. further said attribute need today s action inherent conflict , flawed business model embedded in gse structure, , ongoing housing correction. same day, federal reserve bank chairman ben bernanke stated support: endorse both decision fhfa director lockhart place fannie mae , freddie mac conservatorship , actions taken treasury secretary paulson ensure financial soundness of 2 companies.

the combined gse losses of us$14.9 billion , market concerns ability raise capital , debt threatened disrupt u.s. housing financial market. treasury committed invest as us$200 billion in preferred stock , extend credit through 2009 keep gses solvent , operating. 2 gses have outstanding more us$ 5 trillion in mortgage-backed securities (mbs) , debt; debt portion alone $1.6 trillion. conservatorship action has been described 1 of sweeping government interventions in private financial markets in decades, , 1 turn biggest , costliest government bailout ever of private companies .