The bailout of insurance giant AIG International Group Inc. also makes taxpayers majority owners of a company that insures mortgages guaranteed by Fannie Mae and Freddie Mac -- those entities were placed under government conservatorship on Sept. 7. The Federal Reserve announced late Tuesday that it would lend up to $85 billion to AIG in exchange for an 80 percent ownership interest in the company. The loan will help AIG sell certain subsidiaries "in an orderly manner, with the least possible disruption to the overall economy," Fed officials said. AIG's subsidiaries include United Guaranty Residential Insurance Co., the fifth-largest private mortgage insurer in the United States with a 12 percent share of the $357 billion in new private mortgage insurance written in 2007, according to Fitch Ratings. Although United Guaranty is still considered adequately capitalized to write new mortgage insurance policies for Fannie Mae and Freddie Mac, its expected that it and ot...
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