U.S. Government Takes Control of Mortgage Giants

On Sunday the United States government seized control of the Fannie Mae and Freddie Mac companies, which fund about 75% of the country's new home mortgages.

The seizure was made in a dramatic attempt to rescue the companies from the presently flailing housing market and mortgage crisis, and to prevent any disastrous economic repercussions should the companies fail.

The takeover means that the management for each company will be replaced, and that the government will provide as much as $200 billion to cover losses.

Though mortgage rates are likely to be lowered in light of the decision, existing shareholders are likely to suffer a loss.

Click here for more details about the seizure and predictions about its effects, courtesy of the Wall Street Journal.