FX.co ★ The US Department of Treasury offered to close up Fannie Mae and Freddie Mac

The US Department of Treasury offered to liquidate the nationalized mortgage agencies Fannie Mae and Freddie Mac, reports Bloomberg. The corresponding theses are comprised in the report of the US Treasury Secretary Timothy Geithner and the Housing and Urban Development Secretary Shaun Donovan.
In the body of the document Geithner mentioned that the administration is planning to hold a fundamental reform. In addition to disbandment of these agencies it is also advisory to strengthen the security of consumers and to provide the affordable housing to all who needs it.
At the moment the mortgage agencies own or insure around 97% of all home loans in the USA. In case the government follows the way of privatization of Fannie and Freddie, the mortgage rates can grow significantly, and the house prices can downfall, the Moody's analysts consider. The mortgage agencies were established in the USA to increase the accessibility to the real estate market by means of credit rates guarantees. Until September 2008, they were considered private enterprises, sponsored by the government, (GSE), but being under the threat of the financial breakdown they were taken over by the government.
The cost of the governmental support of Fannie Mae and Freddie Mac has already amounted to 150 billion US dollars. The total losses of agencies for the last three years exceeded 200 billion UD dollars.