US Offers Unlimited Aid to Fannie, Freddie

The Obama administration yesterday gave a blank check to Fannie Mae and Freddie Mac—just in case. The government declared it is willing to provide unlimited financial assistance to the mortgage giants over the next three years, a move designed to reassure markets that the US won't let them fail. The development comes along with a possible PR crisis, reports the Washington Post: Top executives at the two agencies are getting fat paychecks.

A dozen officials will get a total of $42 million in compensation for 2009. Fannie and Freddie have received $111 billion in aid since the Bush administration put them under government control in 2008. By acting yesterday before a Dec. 31 deadline, the Treasury Department can now provide however much emergency aid it deems necessary without going through Congress. The previous cap had been $400 billion.
(More Fannie Mae stories.)