Analysts have said that government owned mortgage security firms, Fannie and Freddie might be too profitable to be shut down, as planned by the government.

The government has offered to save mortgage finance giants Fannie Mae and Freddie Mac in 2008.  This involved the largest of the bailouts with a conbined $187.5 billion because the government thought that they were too big to fail.

The president had earlier called for shutting Fannie Mae and Freddie Mac, the two financial giants that have been offering 30-year mortgages for generations.  Most banks appear unwilling to offer loans for such a duration without any backing from the government.  A group of senators in the US congress are set to complete a plan to liquidate Fannie Mae and Freddie Mac (FMCC) and replace the failed bank with a government reinsurer of mortgage securities with private capital.

Experts have said that the two firms might be too big to close down now.  They said that the government is working to create an alternative where the government might have to repay lenders if another housing market collapse happens in the future.

Source: Top News