Paulson had GSE rescue in the works for weeks--WSJ

NEW YORK, July 14 (Reuters) - U.S. Treasury Secretary Henry Paulson ordered his staffers to craft a rescue plan for mortgage lenders Fannie Mae (FNM.N) and Freddie Mac (FRE.N) two weeks before the plan became public, The Wall Street Journal reported on its website on Monday.

The U.S. Treasury Department and the Federal Reserve took wide ranging and unprecedented steps on Sunday to boost confidence in embattled mortgage finance giants Fannie Mae and Freddie Mac. They increased a government line of credit available to either company, allowed the companies to borrow from the Fed's discount window as necessary, and gave the Treasury Department an option to buy equity in the company if needed.

"A little more than a week ago [Mr. Paulson] began having conversations with us, multiple times a day, to think through what steps we had thought of with regard to preparedness and what steps we need to take," the Journal quoted Anthony Ryan, a Treasury assistant secretary, as saying.

The Treasury Department felt the risk of not supporting the companies was far greater than the risk that they would be sending the wrong message to investors, the Journal reported, quoting people familiar with the Treasury Department's thinking. (Reporting by Emily Chasan; Editing by Tomasz Janowski)