Britannia Radio

US hires Barclays, State Street to manage mortgage debt Published: Friday October 3, 2008 The US Treasury said Friday it had taken on Barclays Global Investors and State Street Corp. to manage the mortgage debt purchased in its takeover of Fannie Mae and Freddie Mac. Officials said they had begun purchases of the debt last week following the nationalization a month ago of the two government-sponsored, shareholder-owned financial firms. The contracts signed were not directly related to a 700-billion-dollar financial bailout approved by Congress on Friday, but the Treasury may use outside firms to buy up distressed mortgage securities under that plan as well. The deals were signed with British bank Barclays' New York branch, which took over some of the operations of Lehman Brothers when it failed last month, as well as State Street Bank and Trust Company, a large asset manager. The deals provide the firms with 0.03 percent of the first five billion dollars in assets and 0.02 percent of the next tranche. For amounts above 10 billion dollars, they will received 0.01 percent. On September 7, the US government took over ailing mortgage giants Fannie Mae and Freddie Mac and placed them in a "conservatorship" in a bid to avert a financial system meltdown from the housing crisis