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Treasury seen set to speak on mortgage firms

WASHINGTON
Sun Jul 13, 2008 4:49pm EDT
U.S. mortgage firm Freddie Mac headquarters is pictured in McLean, Virginia July 13, 2008. U.S. Treasury Department officials are trying to make sure that Freddie Mac will be able sell $3 billion in securities this week at a previously scheduled sale, the Washington Post reported on Sunday. REUTERS/Larry Downing

WASHINGTON (Reuters) - The U.S. Treasury Department will issue a statement on Sunday expressing support for beleaguered mortgage finance lenders Freddie Mac and Fannie Mae, a source familiar with the matter said.

The two shareholder-owned but government-sponsored companies have been under mounting pressure because of a crisis of confidence in financial markets about their ability to stand up to the worsening U.S. housing situation without a government bailout or other help given their tumbling share prices and possible need to raise more capital.

The Treasury Department had no official comment about an expected statement on Sunday. Treasury Secretary Henry Paulson said on Friday that he wanted the two firms to continue in their current form in a statement that markets interpreted as effectively rejecting a government bailout for them.

(Reporting by Glenn Somerville; Editing by James Dalgleish)


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