The plan is to reduce their portfolio
"The companies will be allowed to ?modestly increase? the size of their existing investment portfolios until the end of 2009, which means they can use some of their new taxpayer-supplied capital to buy and hold new mortgages in investment portfolios.
But in a strong indication of Mr. Paulson?s wish to wind down the companies? portfolios, drastically shrink their role and perhaps eliminate their unique status altogether, the plan calls for the companies to start reducing their investment portfolios 10 percent a year, beginning in 2010. "
The government will be one of their shareholders now so taking on or reworking the toxic loans would be counterproductive.
"Hoping to limit potential taxpayer losses and gain any financial windfall if the companies are restored to profitability, the administration, in exchange for the investment commitment, will receive so-called stock warrants, or purchase rights, for up to 80 percent of the companies? common shares at less than $1 a share. In after-hours trading on Sunday, Freddie Mac fell $1.06, or nearly 21 percent while Fannie Mae dropped $1.54, or 22 percent.
The companies agreed to provide the government with $1 billion of new preferred senior stock, which will pay the Treasury a dividend of at least 10 percent a year, as well as an unspecified quarterly payment to compensate the Treasury for any taxpayer money injected into the companies."
http://www.nytimes.com/2008/09/08/business/08fannie.html?ref=patrick.net