US to keep mortgage guarantee

The US Treasury Secretary said yesterday the government will continue to guarantee residential mortgages, despite the demise of Fannie Mae and Freddie Mac. Tim Geithner admitted at a White House summit on the future of the collapsed mortgage giants that the state still has a role to play in backing loans, in order to minimise the risk of further housing-led recessions. The news came as research in America suggested that residential construction projects fell again last month.