Saturday it was annouced and Sunday it is official. 

Notably referred to as the "Treasury and FHFA Action to Protect Financial Markets and Taxpayers," on September 7, 2008 Dept. of Treasury Secretary Poulson and the Federal Housing Finance Agency (FHFA) Director Jim Lockhart announced the takeover of Fannie Mae and Freddie Mac in the form of a "conservatorship." Secretary Poulson annouced their decision was based on the need to provide stability to financial markets, support the availability of mortgage financing and protect the taxpayers.

A Conservatorship is an entity (Fannie & Freddie) subject to the legal control of another entity (FHFA and Dept. of Treasury respectively) while maintaining the entities existance.  Under a conservatorship the market continues to share in the risk and rewards of future investments.  The Treasury simply has taken an explicit role in structuring, funding and managing all activities. 

The Government will now lower the cost of funding and increase the amount of funds available by increasing Fannie and Freddie's Mortgage Backed Securities portfolio in an attempt to escalate the current correction and the stabilization of property prices.  This change in direction is expected to continue through the end of 2009 with the intent to gradually reducing mortgage backed holding portfolios by 10% on a yearly bases to a "less risky size."

Whether or not this is positive movement for the Financial and Real Estate Industry will be seen in the coming years, maybe decades, but it marks a decisive change in direction in the role of government and a recognition of the real estate market's role in the economy.