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The Treasury took a step toward long-term restructuring and downsizing of the companies by requiring them, as a condition of receiving Treasury’s stock investment, to gradually pare down huge portfolios of mortgage loans they have purchased as part of their massive money-making operations in recent years.

Fannie and Freddie would be allowed to increase their portfolios until the end of next year from about $750 billion apiece today to no more than $850 billion. But after that, they would be required to run down the portfolios by 10 percent a year for about a decade until they reach $250 billion apiece.

The planned downsizing of the companies appears in sync with the policies of Republican presidential candidate Sen. John McCain, who has said he wants the agencies to be smaller and more effective.

“Senator McCain thinks that this is a step in the right direction, and we need to protect the taxpayers, and we need to never allow this to happen again,” McCain adviser Nancy Pfotenhauer said Sunday on CNN’s “Late Edition.”

Democratic presidential candidate Sen. Barack Obama has been supportive of the takeover plan, but has not indicated whether he would cut back the agencies or enhance their roles in the housing market.

“Once we ride out the current crisis, the plan must move toward clarifying the true public and private status of our housing policies,” he said Sunday, suggesting that the government’s role shouldn’t only be to provide a bailout. “In our market system, investors must not be allowed to believe that they can invest in a ‘heads they win, tails they don’t lose’ situation.”

The Treasury’s cash infusions follow a complicated playbook. It immediately will take a $1 billion equity stake in each company that could grow to be as large as $100 billion each and which would be senior to both existing preferred and common shares.

The senior preferred stock obtained by the Treasury will carry warrants that will give the government an ownership stake of 79.9 percent and other benefits.

Treasury also set up a program under which it would buy mortgage-backed securities guaranteed by Fannie Mae and Freddie Mac to pump fresh funds into the mortgage market through the end of next year.

The financing scheme does not eliminate existing common and preferred stock, but requires existing shareholders to absorb any losses ahead of the government. Over time, if Fannie and Freddie emerge from restructuring healthy and profitable again, stockholders may benefit.

Financial analysts applauded the move, but stock investors were expected to react badly to their much-diminished prospects when markets reopen Monday.

“The nationalization of Fannie and Freddie hits some right notes,” said Rob Cox, analyst at BreakingViews.com. “The CEOs are ousted, equity and preferred holders are hosed and the businesses run off. This should help stabilize U.S. housing. But it leaves the inevitable task of dismantling the [government sponsored enterprises] to a future administration.”

Dominique Strauss-Kahn, managing director of the International Monetary Fund, said the cash infusion was necessary, but should be followed up with an overhaul of the agencies next year. “The Treasury plan allows time to build widespread consensus for important reforms to these institutions, while ensuring, meanwhile, market stability and support for the economic recovery,” he said.