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Feds to pick up bad mortgages

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The U.S. government is attempting to head off a collapse of the financial system by promising to provide "hundreds of billions" of support for financial markets and institutions by purchasing troubled mortgages from banks and other institutions. Bush administration officials including Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke have briefed lawmakers on Capitol Hill on the "urgent need for Congress to pass legislation approving the federal government's purchase of illiquid assets, such as troubled mortgages, from banks and other financial institutions," President Bush said today. "This is a decisive step that will address underlying problems in our financial system," Bush said. "It will help take pressure off the balance sheets of banks and other financial institutions. It will allow them to resume lending and get our financial system moving again." The details of the move to create an agency similar t...