Washington (AP) President Bush says the government stepped in to take over Fannie Mae and Freddie Mac because their failure would be “unacceptable.”
The president says allowing the two mortgage giants to go under, or even sink much more, would have disrupted the financial system and hurt an economy still hobbled by the housing slump. It's a risk Bush says the feds could not take.
But in a written statement, Bush stresses that putting Fannie and Freddie under the federal housing finance agency is a temporary step -- to buy time while their future role is determined.
Bush adds it's “crucial” these companies not be allowed to pose “similar risks” to the U.S. Economy again.
The companies, which togeter own or guarantee about $5 trillion in home loans, have lost 14 billion dollars in the last year and are likely to pile up billions more in losses until the
housing Market begins to recover.