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US Treasury Secretary Defends Mortgage Bailout

U.S. Treasury Secretary Henry Paulson says the government had no choice but to rescue two of America's biggest and most important mortgage lenders.

Paulson tells the CNBC television network Monday the takeover of mortgage giants Freddie Mac and Fannie Mae was "not something I wanted to do," but that it was necessary to restore confidence to the troubled U.S. housing market.

He says the downturn in the housing market is at the heart of the country's economic woes, and that stabilizing the lenders is the first step in creating conditions that can lead to a recovery.

Paulson said he did not know how much the move could cost U.S. taxpayers, adding, "we didn't sit down and figure this out with a calculator."

He did say the takeover could be managed in a way that taxpayers should not lose any money.

U.S. officials announced the takeover Sunday, saying it was necessary to prevent Freddie Mac and Fannie Mae from collapsing under billions of dollars in losses from bad loans.

Paulson said the concerns of foreign central banks were not a major driving factor in the decision to move ahead with the takeover, but noted that there was grave concern from within the U.S. and from around the world.