090206: US Treasury Sends $400 Billion to Fannie Mae & Freddie Mac

Washington (AFP) – The US Treasury Department said it was doubling its financial support to troubled mortgage finance giants Fannie Mae and Freddie Mac, to 200 billion dollars each, in an effort to stabilize the real estate sector.

"The Treasury Department is increasing its funding commitment to Fannie Mae and Freddie Mac to ensure the strength and security of the mortgage market, to help maintain mortgage affordability, and to help keep interest rates low," Treasury Secretary Timothy Geithner said in a statement.

"Using funds already authorized by Congress for this purpose, Treasury is amending the Preferred Stock Purchase Agreements, contractual agreements between the Treasury and the conserved entities designed to ensure that each company maintains a positive net worth, to 200 billion dollars each from their original level of 100 billion dollars each," Geithner said.

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