The housing slump in the United States appears to have brought down even the largest of the large lenders.A US Government takeover of mortgage-lenders, Fannie Mae and Freddie Mac, appears to be imminent. Between them, they account for 70% of all new mortgages in the United States. They hold over US$5 trillion in mortgage loans.
Shareholder equity will be effectively wiped out by the move to impose a government conservatorship on the two mortgage giants. The size of any liability assumed by US taxpayers isn't known, but will be many billions of dollars.This is huge. What it means for the US economy is hard to say. I wonder how many - if any - pension funds lost huge money as the share values of the two biggies lost over 80% of their value in recent months?
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