Say good-bye to Fannie and Freddie as you know them
By Dawn Kopecki

The bailed-out mortgage finance companies will emerge from their travails combined as one, broken up or with substantially reshaped missions, according to U.S. lawmakers and analysts. U.S. regulators seized Fannie Mae and Freddie Mac in September amid a rise in mortgage delinquencies that led to a combined loss of $108.8 billion last year. The U.S. Treasury has injected $59.8 billion in emergency funds into the companies. The Treasury has agreed to give the two government- sponsored enterprises, or GSEs, as much as $400 billion through Dec. 31. That agreement probably will need to be extended by Congress before year-end, said Karen Shaw Petrou, a managing partner of Federal Financial Analytics Inc., a Washington-based research firm. “There will be a massive re-write of the GSEs into some new structure,” though probably not this year, Petrou said. House Financial Services Committee Chairman Barney Frank, a Massachusetts Democrat, is exploring ways to separate the companies’ private and public missions, said Steve Adamske, a Frank spokesman. A government trust fund would assume the companies’ responsibilities to subsidize rental housing and a remaining company would continue to do business in the private mortgage market, according to Adamske, who said it’s too soon to say what the final structure would look like.