Government takes over Freddie, Fannie
The federal government took unprecedented steps this weekend in taking control of mortgage giants Freddie Mac and Fannie Mae.
U.S. Treasury Secretary Henry Paulson concluded that the companies’ failures were too risky to the U.S. financial and housing markets. The two companies back or own more than half the mortgages in the U.S. and recent losses at the companies made home mortgages more difficult to obtain.
Under the takeover, the government could infuse the companies with a total of $200 billion in taxpayer money. Under the plan, Freddie CEO Richard Syron and Fannie CEO Daniel H. Mudd will be replaced by David M. Moffett, former vice chairman and chief financial officer of U.S. Bancorp, and Herbert M. Allison Jr., former chairman and chief executive of pension fund, TIAA-CREF, respectively. (The Washington Post)
In other business news,
-A major Norfolk developer is stepping away from some redevelopment projects because of the uncertain economy. Bobby Wright, who was one of the first developers to redevelop properties on Granby Street in Norfolk, is having trouble finding banks will to lend money necessary for the projects. (The Virginian-Pilot)
-Richmond-based Altria announced it will pay $11.7 billion to acquire UST Inc., the manufacturer of Skoal and Copenhagen smokeless tobacco products. (The Richmond Times-Dispatch)
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