McCain backs government takeover of mortgage giants

ALBUQUERQUE, September 6, 2008 (AFP) - Republican presidential hopeful John McCain backed a government takeover of two mortgage giants Saturday while his Democratic rival warned that taxpayers should not bail out their shareholders.

Asked whether Freddie Mac and Fanny Mae -- which underwrite millions of US mortgages -- should be placed in a conservatorship, McCain said "I think it has to be done.



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"We've got to keep people in their homes," McCain told Face the Nation in an interview set to be broadcast Sunday.

But McCain said the temporary takeover should not be a blank check to the executives who were paid massive salaries while they mismanaged the mortgage giants.

"There's got to be restructuring, there's got to be reorganization, and there's got to be some confidence that we've stopped this downward spiral," McCain said.

"This is the kind of cronyism, corruption, that's made people so justifiably angry.


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Fannie Mae and Freddie Mac are government-chartered, shareholder-owned firms which own or guarantee nearly half of the nation's mortgages totaling more than five trillion dollars.

They buy mortgages from smaller institutions, repackage them and resell them as securities: a critical function in

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