McCain backs action to support Freddie, Fannie

HUDSON, Wisconsin (Reuters) - Republican presidential contender John McCain said on Friday that government assistance would likely be needed for Freddie Mac and Fannie Mae because a failure of the two mortgage giants would have a ripple effect through the entire U.S. economy.

"I would support effective action to keep them from going under," McCain said told reporters on his campaign bus in Wisconsin. "I don't know exactly what that action is now. Obviously it's going to entail raising capital."

The Arizona senator said if the two mortgage finance providers failed it would create a ripple effect through the entire U.S. economy, so "there's no doubt that we can't have these two institutions go under."

(Reporting by Jeff Mason; Editing by Dan Grebler)