Washington (AP) -- The government takeover of mortgage giants Freddie Mac and Fannie Mae, which was confirmed today, could cost taxpayers tens of billions of dollars.
But Treasury Secretary Henry Paulson says the cost could have been far greater if either of them had been allowed to fail. He says that would have affected the ability of Americans to get home and auto loans, and other credit.
Cong. Frank reacts to takeover
The Bush administration's move puts both agencies into a government conservatorship that will be run by the Federal Housing Finance Agency.
Officials say the executives and board of directors of both institutions have been replaced. Former Merrill Lynch vice chairman Herb Allison will head Fannie Mae, and former US Bancorp vice chairman David Moffett was picked to head Freddie Mac.
Paulson says it will be up to Congress and the next president to decide what the two companies will ultimately look like.
The companies own or guarantee about five trillion dollars in home loans. That's about half of the nation's total.
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