US takes over key mortgage firms

US takes over key mortgage firms


US President George Bush says mortgage giants Freddie Mac and Fannie
Mae have been taken over because they posed "an unacceptable risk" to
the economy.

The two companies
account for nearly half of the outstanding mortgages in the US, and
have lost billions of dollars during the US housing crash.

The most recent figures show about 9% of US homeowners were behind on their payments or faced repossession.

The federal takeover is one of the largest bail-outs in US history.

It was announced on Sunday by Treasury Secretary Henry Paulson.

"Putting these companies on sound financial footing, and reforming
their business practices, is critical to the health of our financial
system," President Bush said.

"The actions taken today are temporary, and will support housing finance in the near term."

‘Comprehensive action’

As part of the changes, the management of the two companies will be
replaced while the firms will be given access to extra funding to
support their business going forward.

Treasury Secretary Henry Paulson said the government
was intervening in the wider interests of the financial system and of
taxpayers since the financial position of the two firms was fast
deteriorating.

A failure of either of them would create great turmoil in financial markets here and around the globe

Henry Paulson on Freddie Mac and Fannie Mae

He added that the two firms’ debt levels posed a "systemic risk" to
financial stability and that, without action, the situation would get
worse.

"We examined all options available and determined this
comprehensive and complementary set of actions best met the objectives
of market stability, mortgage availability and taxpayer protection," he
said.

"Fannie Mae and Freddie Mac are so large and interwoven
in our financial system that a failure of either of them would create
great turmoil in financial markets here and around the globe."

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US treasury statement on the future of Freddie Mac and Fannie Mae

The move is intended to keep the two companies afloat, amid fears that
either could go bankrupt as borrowers default on their home loans.

The two firms will be administered by the Federal Housing Finance Agency until their long-term future is decided.

The Congressional Budget Office has said such a move could cost up to
$25bn but Mr Paulson said there was no reason why taxpayers should have
to directly foot the bill.

Funding guarantee

Together, Freddie Mac and Fannie Mae own or guarantee about $5.3 trillion (£3 trillion) of mortgages.

But they have made a combined loss of about $14bn in the past year and
officials were worried that they would no longer be able to continue
functioning if such losses continued.

PESTON’S PICKS

For the US Treasury, the bailout could turn out to be one of the most expensive financial rescues in history

The Treasury’s funding guarantees to the two firms – which will include
it buying up high-risk mortgage backed securities used to fund the
mortgage market – will last until the end of 2009.

During that period, neither Fannie Mae nor Freddie Mac will be able to make any payments to their shareholders.

But Mr Paulson warned that the move was only a short-term "stabilisation" exercise.

He said it would be up to Congress to agree proposals to reform the two firms and address their "pervasive weaknesses".

Federal Reserve chairman Ben Bernanke said he "strongly endorsed" the
proposals to ensure the two firms remained financially sound.

"These necessary steps will help to strengthen the US housing market and promote stability in our financial markets," he said.

Banks around the world are highly exposed to the two companies and
therefore, given the febrile state of markets across the world, it had
become dangerous for doubts to persist about whether they were viable
and would be able to keep up the payments on their massive liabilities,
says the BBC’s business editor Robert Peston.

A rescue plan passed by Congress in July gave the US
government the authority to offer unlimited liquidity to the two
companies, and to buy their shares, in order to keep them afloat.

  1. US takes over key mortgage firms  美国接管两家两家关键房贷公司。
  2. posed "an unacceptable risk" to
    the economy  给经济带来不可接受的风险
  3. The two companies
    account for nearly half of the outstanding mortgages in the US  两家公司承担了将近半数的美国房贷业务
  4. lost billions of dollars during the US housing crash  在美国房屋次贷危机中,损失了数亿美元。
  5. The most recent figures show about 9% of US homeowners were behind on their payments or faced repossession.  最新数据显示,大约9%的房屋拥有者都无法按时偿还按揭,或者面对银行资产收回。
  6. The federal takeover is one of the largest bail-outs in US history.  联邦政府的接管是美国历史上最大的政府接管事件之一。
  7. "Putting these companies on sound financial footing, and reforming
    their business practices, is critical to the health of our financial
    system," President Bush said.让这些公司置身于良好的金融环境,并且改善业务活动,是保持我们的金融系统健全的至关重要的。
  8. will support housing finance in the near term  将要支持房贷金融在近一段时间。
  9. ‘Comprehensive action’ 全面行动。
  10. As part of the changes, the management of the two companies will be
    replaced while the firms will be given access to extra funding to
    support their business going forward. 作为变化的一部分,两家公司的管理将被替换掉,同时机构将获得外部的融资去支撑业务的正常进行。
  11. the government
    was intervening in the wider interests of the financial system and of
    taxpayers since the financial position of the two firms was fast
    deteriorating.  政府正在干预广大金融系统和纳税人的利益,因为两家机构的金融状况在迅速恶化。
  12. A failure of either of them would create great turmoil in financial markets here and around the globe  任何一家机构的破产将使美国的金融市场,以至世界金融市场,陷入巨大的混乱
  13. US treasury statement on the future of Freddie Mac and Fannie Mae  联邦储备局对两家机构未来的公布。
  14. He added that the two firms’ debt levels posed a "systemic risk" to
    financial stability and that, without action, the situation would get
    worse.  他继续说道,两家公司的债务水平已经对金融市场的稳定性构成了系统性的威胁,并且如果不采取行动,状况会恶化。
  15. "We examined all options available and determined this
    comprehensive and complementary set of actions best met the objectives
    of market stability, mortgage availability and taxpayer protection," he
    said.我们仔细检查了所有可能的方案,确定这个整体性的和互补性的一揽子方案最适合市场稳定的目标,房贷的持续性和对纳税者的保护。
  16. "Fannie Mae and Freddie Mac are so large and interwoven
    in our financial system that a failure of either of them would create
    great turmoil in financial markets here and around the globe." 这两家机构是如此庞大,并且在金融系统中关联复杂,以至于任何一家公司的倒闭都会对美国金融市场乃至全球金融市场产生巨大的破坏。
  17. The move is intended to keep the two companies afloat, amid fears that
    either could go bankrupt as borrowers default on their home loans. 该次举动是为了保持两家机构的支付能力,在大众的对于它们可能因为房贷者无法按时支付按揭而倒闭恐惧中。
  18. The two firms will be administered by the Federal Housing Finance Agency until their long-term future is decided. 两家机构将被联邦房贷融资机构监管,直到它们的长期远景被明确下来。
  19. The Congressional Budget Office has said such a move could cost up to
    $25bn but Mr Paulson said there was no reason why taxpayers should have
    to directly foot the bill.国会预算办公室说到,这样的举措将耗资25亿美元,但是也说到纳税人不得不去直接买单实在没有理由。
  20. Funding guarantee 融资保证
  21. Together, Freddie Mac and Fannie Mae own or guarantee about $5.3 trillion (£3 trillion) of mortgages.  两家机构一共拥有和担保着总价值预计5。3亿的按揭。
  22. But they have made a combined loss of about $14bn in the past year and
    officials were worried that they would no longer be able to continue
    functioning if such losses continued.但是,在过去的一年里他们损失了共计14亿美元,而且官员担心他们无法继续正常运营,如果这样的损失持续下去。
  23. For the US Treasury, the bailout could turn out to be one of the most expensive financial rescues in history

    对于联邦储备局,这次接管将会成为历史上最昂贵的金融营救性的措施。

  24. The Treasury’s funding guarantees to the two firms – which will include
    it buying up high-risk mortgage backed securities used to fund the
    mortgage market – will last until the end of 2009.  联邦储备局的融资将确保流向两家机构,其中包括收购那些用于给房贷市场融资的高风险房贷支撑的股票。
  25. During that period, neither Fannie Mae nor Freddie Mac will be able to make any payments to their shareholders.  在那期间,两家机构的任何之一都无法给股东带来任何收益。
  26. But Mr Paulson warned that the move was only a short-term "stabilisation" exercise. 但是某认为这个举措仅仅是短期的稳定市场的做法。
  27. He said it would be up to Congress to agree proposals to reform the two firms and address their "pervasive weaknesses".  他说到,那是国会的权利去同意该项建议,即改革两家机构,并且承认他们的无处不在的脆弱。
  28. Federal Reserve chairman Ben Bernanke said he "strongly endorsed" the
    proposals to ensure the two firms remained financially sound.联邦储备局总裁说到,他强烈支持确保两家机构保持运转良好建议。
  29. "These necessary steps will help to strengthen the US housing market and promote stability in our financial markets," he said. 这些措施将帮助强化美国房贷市场,并提升我们金融市场的稳定性。
  30. Banks around the world are highly exposed to the two companies and
    therefore, given the febrile state of markets across the world, it had
    become dangerous for doubts to persist about whether they were viable
    and would be able to keep up the payments on their massive liabilities,
    says the BBC’s business editor Robert Peston.  世界各大银行都和两家机构保持高度业务合作,因此在世界各地获得了良好的市场行情,那些怀疑曾经变得一场危险,即他们是否可靠并且有能力在持有大量债务的情况下跟得上按揭支付的步伐。
  31. A rescue plan passed by Congress in July gave the US
    government the authority to offer unlimited liquidity to the two
    companies, and to buy their shares, in order to keep them afloat.  在7月份被美国国会通过的该项经济援助计划赋予美国政府为两家机构提供无限制的资金,和购买它们股份的权利来保持它们运转良好。

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