Bush says takeover of mortgage giants necessary because of unacceptable risk

By The Associated Press

WASHINGTON - U.S. President George W. Bush says the historic government takeover of mortgage giants Fannie Mae and Freddie Mac is necessary because of the "unacceptable risk" that they can longer operate soundly.

The Bush administration announced Sunday it was taking control of the two institutions to avert the potential for major financial turmoil.

In a statement, the president called the moves temporary. He said putting the companies on sound footing is "critical to the health of our financial system."

Bush said the government action came after federal regulators determined the housing giants "cannot continue to operate safely and soundly."

He said such uncertainty posed an "unacceptable risk to the broader financial system and our economy."