Frank: Fannie, Freddie won't need rescue

FOXBOROUGH - US House Financial Services Committee chairman Barney Frank said the Treasury will not have to come to the rescue of the two largest sources of US mortgage financing, Fannie Mae and Freddie Mac.

"I don't think it's going to be necessary," he said at a foreclosure prevention workshop at Gillette Stadium in Foxborough yesterday. "Fannie and Freddie have survived housing better than a lot of other people."

After Fannie and Freddie reported combined second-quarter losses of $3.1 billion last week, some investors predicted Treasury Secretary Henry Paulson would be forced to use powers provided by Congress last month to support the companies through capital injections or debt purchases. Government-chartered Fannie and Freddie account for almost half of the $12 trillion of US residential mortgages.

Countrywide Financial Corp., acquired by Bank of America Corp., and Bear Stearns Cos., acquired by JPMorgan Chase & Co., are examples of companies hurt more severely than Fannie or Freddie, Frank said.