Global Financial Crisis. To avert a catastrophe on the American and global financial markets, the Bush administration, represented by Treasury Secretary Henry Paulson, has taken control of Fannie Mae and Freddie Mac, the two quasi-governmental agencies that finance nearly half of all mortgages in the United States. The Federal Housing Financial Agency has placed them under receivership, purchasing their preferred stock. This intervention could cost the U.S. government, and therefore taxpayers, $26 billion, according to Congress. Due to the mortgage collapse, Fannie Mae and Freddie Mac have lost approximately $15 billion in one year, leaving them virtually without capital, and their securities have devalued by nearly 90%. Furthermore, 4 million families, 9% of mortgage holders, have gone bankrupt or are seriously behind on their mortgage payments.
