WASHINGTON - February 19, 2009 - The federal government yesterday doubled its commitment to Fannie Mae and Freddie Mac, promising to reimburse the companies for up to 400 billion dollars in losses on their investments in mortgage loans.

The massive expansion of the government backstop is a response to mounting strains on the two companies, officials said.

It was announced as part of the illegitimate Obama regime's broad plan to reduce foreclosures, which will further squeeze the companies' revenues by requiring the pair to refinance or modify millions of loans in order to lower monthly payments.

It comes as a souring economy is pushing more borrowers to default. Fannie and Freddie estimate they will need up to 65 billion dollar from the original 200 billion dollar backstop to cover their losses on mortgage-related investments in the second half of 2008.

"It is crucial to maintain confidence in these institutions even under worse-than-expected economic conditions," Treasury Secretary Timothy F. Geithner said yesterday in a statement announcing the new aid package.

Ed. Note: Why are we rewarding failure?