Fannie Mae and Freddie Mac continue to present challenges to the financial system. Officials, business leaders and other industry observers have called for the mortgage giants to be either sold or nationalized, arguing that their dual roles are not sustainable. However, the Treasury Department, rather than extricating itself from the companies, last week removed a $200 billion-limit on state aid to Fannie and Freddie and pledged to cover their losses for the next few years. The Federal Reserve previously extended through March a mortgage-bond purchase program that helps Fannie and Freddie.
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