11/11/2008

The U.S. Treasury is on the verge of injecting as much as $100 billion of fresh capital into Fannie Mae, only three months after the government took over the corporation. The Treasury is worried that mortgage rates will soar if Fannie is forced into liquidation, making it enormously difficult for the housing market to climb out of its worst slump since the Great Depression. Analysts said a Treasury infusion for Fannie and Freddie Mac would boost market confidence and eventually help loosen up the mortgage market.

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Reuters

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