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Fannie, Freddie to buy mortgage-backed securities

Fri Sep 19, 2008 2:04pm EDT

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WASHINGTON, Sept 19 (Reuters) - The regulator of mortgage finance firms Fannie Mae (FNM.N) and Freddie Mac (FRE.N) said on Friday that it had directed the companies to buy mortgage-backed securities immediately.

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James Lockhart, director of the Federal Housing Finance Agency, said as part of a federal financial rescue plan unveiled on Friday, the government-sponsored housing finance companies were asked to "provide additional funding to mortgage markets through the purchase of mortgage-backed securities.

"As conservator of Fannie Mae and Freddie Mac, FHFA has directed each company to implement such a purchase program immediately," he said in a statement.

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