Government to replace Fannie, Freddie

Moody's expects government to replace Fannie, Freddie

Moody's Investors Service said the government likely will find it necessary to wind down and replace Fannie Mae and Freddie Mac, which face mounting losses and were seized by regulators in September. "This is not bad news for Fannie Mae and Freddie Mac bondholders as the U.S. government has become entwined with these companies, and the creation of a new entity to support housing finance likely means the orderly conclusion of Fannie Mae and Freddie Mac," wrote Moody's analysts Brian L. Harris, Craig A. Emrick and Robert Young.

-Bloomberg