The United States government has announced sweeping measures to support the nation's two largest mortgage finance companies Freddie Mac and Fannie Mae.
The move guarantees both companies' debts and is being led by Treasury Secretary Henry Paulson, in a move to shore up confidence in their survival. The plan calls on Congress to expand the companies' current line of credit and allow the Treasury to buy equity capital in the companies if needed. The two lenders guarantee almost half of all US home loans. Their share prices fell by almost 50% last week. The meltdown has raised fears of a possible worsening of the credit crunch.
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