WASHINGTON, Sept 8: The unprecedented US takeover of struggling mortgage giants Fannie Mae and Freddie Mac offers hope for an easing of the credit and housing crunch while putting the government’s balance sheet on the line, analysts said on Monday.

The initial market reaction was overwhelmingly positive to Sunday’s announcement of a government conservatorship -- the equivalent of a bankruptcy reorganisation under the aegis of the government.

Under the plan, the two firms will get government-appointed chief executives and shed their mission of shareholder profit. The Treasury agreed to inject $100 billion in each if needed.

“Although Fannie and Freddie shareholders will lose, and the move will cost

US taxpayers tens of billions of dollars, the housing market will receive an important boost via lower mortgage rates and more available mortgage credit,” said Mark Zandi, chief economist at Economy.com.—AFP