Treasury May Buy Some Bad Apples From Fannie Mae and Freddie Mac

By: • Mon, Oct 6 2008, 9:19 AM

Mortgage giants Fannie Mae and Freddie Mac could possibly sell some bad assets to the U.S. Treasury, according to a media report. James Lockhart, director of the Federal Housing Finance Agency (FHFA) which now oversees the two companies, gave a television interview to C-SPAN.

In the interview, he guessed about two to four percent of their assets are deficient.

The $700 billion bailout plan which allows the U.S. government to buy bad assets was officially made law on Friday.

Fannie Mae and Freddie Mac were taken over the by the U.S. government in September. The two companies have control over almost half of the $12 trillion in mortgage debt in the United States.