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Paulson: Prime focus to support GSEs in "current form"
July 11, 2008 / 2:32 PM / 9 years ago

Paulson: Prime focus to support GSEs in "current form"

WASHINGTON (Reuters) - Treasury Secretary Henry Paulson said on Friday that his chief aim at present is to back government-sponsored mortgage finance companies Fannie Mae and Freddie Mac in their “current form”, giving no sign a government bailout of them was imminent.

<p>President George W. Bush speaks during a meeting with members of his economic team at the Department of Energy in Washington July 11, 2008. From left are Energy Secretary Sam Bodman, Treasury Secretary Henry Paulson and Bush. REUTERS/Kevin Lamarque</p>

“Today our primary focus is supporting Fannie Mae and Freddie Mac in their current form as they carry out their important mission,” Paulson said in a statement, which he said was issued in response to media reports about “contingency planning” at the Treasury on the fate of the major mortgage finance companies.

Paulson’s statement appeared at odds with a report in the New York Times that the Bush administration is considering plans to shut down and take over the mortgage enterprises, whose financial soundness has come into question amid a severe credit crunch and housing market downturn.

“We appreciate Congress’ important efforts to complete legislation that will help promote confidence in these companies. We are maintaining a dialogue with regulators and with the companies,” he said.

“OFHEO (The Office of Federal Housing Enterprise Oversight) will continue to work with the companies as they take the steps necessary to allow them to continue to perform their important public mission,” he added.

Reporting by Mark Felsenthal and Alister Bull; Editing by Chizu Nomiyama

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