Fannie & Freddie bail-out agreed

The troubled US mortgage finance firms Fannie Mae and Freddie Mac yesterday received a welcome boost when bipartisan political plans were approved that will help to baail out the companies.

The move, which will also act as a shot in the arm to the moribund US housing market as a whole, will put in a place a government-secured back-up in the form of Federal aid to the two firms and which may provide US Treasury support too.

The measures were part of the Hosuing Rescue Bill which was passed by the House of Representatives last night despite George W Bush having earlier threatened to veto it, unhappy as he was with its provision for $3.9bn of grants to neighbourhoods worst hit by the credit crunch.