Consumer Law

U.S. Plans Rescue of Fannie Mae and Freddie Mac and Backs Off - - for Now

By Brian Wolfman

This story in today's Washington Post describes the federal government's emergency plan for the bail out of the huge mortgage backers Fannie Mae and Freddie Mac and that the government backed off after signs that the institutions were stable -- for now. The article also describes the failure of a major California bank. Here's a taste of the story:

Senior government officials prepared emergency steps yesterday to rescue troubled mortgage giants Fannie Mae and Freddie Mac but stopped short after a campaign of public statements eased immediate concerns about the stability of the institutions.

But federal regulators were forced yesterday to seize California-based IndyMac Bancorp after a run by depositors led to the second-largest failure ever of a U.S. financial institution. The bank, which was taken over by the Federal Deposit Insurance Corp., became the first major bank to shutter its doors since the savings and loan crisis of the early 1990s. One of the country's largest home lenders, IndyMac saw its holdings battered by the downturn in the housing market.

Full post as published by CL&P Blog on July 12, 2008 (boomark / email).