WASHINGTON (Reuters) - The U.S. Treasury Department and the Federal Reserve took wide ranging and unprecedented steps on Sunday to boost confidence in embattled mortgage finance giants Fannie Mae and Freddie Mac.
Treasury Secretary Henry Paulson said he was acting after consulting with the Fed, the companies' regulator, the Securities and Exchange Commission, and congressional leaders of both political parties.
Key moves included:
* The Treasury increased a government line of credit available to either company, by an amount to be determined by the Treasury. Each company can currently draw up to $2.25 billion from the Treasury.
* The Fed authorized the government-sponsored enterprises to borrow from its discount window as necessary. Any lending would be collateralized by U.S. government and agency securities.
* The Treasury said it would buy equity in either company if needed.
* The Fed would, as a part of legislation aimed at boosting oversight of the companies that is making its way through Congress, take on a "consultative role" in setting capital requirements and financial safety and soundness standards for the two companies.
* Fannie Mae's total book of business topped $3 trillion. Freddie has $2.2 trillion in investments and guarantees, meaning the two own or guarantee nearly half the U.S. mortgage market.