UPDATE 2-GSE takeover no threat to US 'AAA' rating-Moody's

(Adds economist's comment)

NEW YORK, Sept 8 (Reuters) - The U.S. government takeover of mortgage funding companies Fannie Mae (FNM.N) and Freddie Mac (FRE.N) poses no threat to the U.S. "AAA" sovereign debt rating, Moody's Investors Service said on Monday.

Though the government's cost of borrowing may rise, the de facto nationalization of the troubled mortgage funding companies will likely result in a stronger U.S. economy than would have otherwise been the case, said Pierre Cailleteau, head of the sovereign ratings group for Moody's.

"Not intervening would not have left public finances in any better shape," Cailleteau said on a conference call.

The U.S. government on Sunday seized control of Fannie Mae and Freddie Mac to support the U.S. housing market and ward off more global financial market turbulence. For details see [ID:nN07479172].

The Treasury took $1 billion of preferred senior stock in each company and said its equity stake could reach as much as $100 billion in each.

Even if the government has to inject the full $100 billion in each company, its access to funding is so large that it could easily raise that amount of cash, Cailleteau said. By comparison, the government's gross borrowings last year were about $4 trillion, he said.

One of the primary benefits from the government's action will be lower mortgage rates, which are likely to fall well below 6 percent, said Mark Zandi, chief economist at Moody's Economy.com.

Interest rates on 30-year fixed-rate mortgages fell to near 6.00 percent Monday from 6.50 percent on Friday, according to Greg McBride, senior financial analyst at Bankrate, Inc, in North Palm Beach, Florida. [ID:nNO8451692].

Still, the takeover has not changed Moody's outlook for home prices, which are expected to fall another 5 to 10 percent, Zandi said.

"While the Treasury's action was necessary and a very very positive step, it's not a silver bullet," he said. Job losses are intensifying, and it will take time to work off the excess inventory of homes, estimated at nearly one million units in June, he said.

Moreover, the recapitalization of Fannie and Freddie will likely cost U.S. taxpayers about $100 billion over the short term, Zandi said. Over the long term, the ultimate cost to the government will probably be less because of dividend payments the Treasury will collect and because the companies may be reprivatized, he said.

By comparison, the savings and loan crisis cost the U.S. Treasury about $250 billion in today's dollars, he said. (Reporting by Dena Aubin; Editing by Walker Simon)