The Federal Government will assume operating control of Freddie Mac and Fannie Mae and will purchase a large amount of preferred stock in each entity.

U.S. federal regulators, in a dramatic move highlighting the tenuous state of global credit markets, outlined a takeover of Fannie Mae and Freddie Mac on Sunday morning, including giving control of the firms to their regulator and allowing the Treasury Department to purchase billions of dollars of the firms' senior preferred stock…Mr. Paulson acknowledged that the radical proposal does pose risks for U.S. taxpayers, giving the U.S. government a "large stake in the future value of these entities."

It is impossible to overstate just how big this news is. The Federal Government believed the two giant financial entities were going to collapse. The impact on Maui real estate will be limited in the near term. Longer-term, this will likely help stabilize the housing and mortgage markets.