(Updated 5:21 p.m. Eastern) WASHINGTON -- The U.S. Treasury on Friday revamped the bailout of Fannie Mae and Freddie Mac to curb chances the giant mortgage finance firms could emerge from government control as the powerful, profit-driven corporations they once were.

The Treasury said it would require the companies, whose massive losses threatened the financial system after the housing bubble burst in 2007, to shrink their investment portfolios more quickly and turn over any profits to taxpayers.

Previously, the companies, which buy mortgages from lenders and repackage them as securities for investors, were required to make a 10 percent dividend payment to the Treasury. At times, they had to borrow from the Treasury just to make the payments, (back to the Treasury). Now, they simply won't be able to retain any profits.

The new terms mark the latest step in Fannie Mae and Freddie Mac's fall from grace. The two companies were highly profitable and politically powerful as the U.S. housing bubble built. Now, most officials think they should eventually be dissolved.

Lawrence Yun, chief economist at the National Association of Realtors, said the changes effectively make the two companies government utilities. "That new institution will be such that it's not going to be a for-profit company. It's just going to generate enough revenue to operate," he said.

Fannie Mae and Freddie Mac were seized by the government at the height of the financial crisis in 2008 as mortgage losses threatened their solvency. Since then, they have drawn a total of $188 billion in taxpayer funds to stay afloat, while paying more than $45 billion in dividends, (amount paid back).

At the start of next year, the unlimited support the Treasury extended to the two companies will expire. After December 31, Fannie Mae's bailout will be capped at $125 billion and Freddie Mac will have a limit of $149 billion.

The companies' corporate debt price rallied as the new policy alleviated the need for Fannie Mae and Freddie Mac to borrow from the government just to make dividend payments, putting them in a better position to service their debt.

"You fixed the major flaw in the initial agreement," said Jim Vogel, interest rate strategist at FTN Financial in Memphis, Tennessee.

However, their preferred shares lost more than half their value in heavy trading as investors saw the plan as undercutting the ability of either company to ever emerge from government conservatorshipas profitable entities. Their common shares also fell.

With the U.S. housing market showing signs of improvement and Fannie Mae and Freddie Macreducing their portfolios of loans with poor credit quality, the government-controlled companies posted strong profits in the second quarter of this year.

The Treasury said the altered bailout terms would ensure that "every dollar of earnings that Fannie Mae and Freddie Mac generate will be used to benefit taxpayers for their investment in those firms."

The American Bankers Association, which represents all U.S. banks, praised Treasury's move and said it helps ensure that taxpayers will ultimately be repaid.

Although the Treasury said the changes would accelerate plans to eventually shut the companies down, the announcement did little to address how that might be achieved or how the government's footprint in the mortgage finance market might shrink. Fannie Mae, Freddie Mac and the Federal Housing Administration finance nine out of every ten new home loans.

Early last year, the administration proposed three options to reshape the housing finance system, ranging from privatizing the market almost entirely to allowing the government to insure certain mortgages. But the administration has never provided detailed plans on how to move forward.

While Democrats and Republicans agree on the need to reduce the government's role in housing finance, they disagree on how sharply it should be scaled back.

Representative Elijah Cummings, a Democrat heavily involved in housing issues, applauded the new terms, which will also require the companies to annually submit plans to Treasury on how they will protect taxpayers' interests.

In contrast, Republican Representative Scott Garrett, who chairs a congressional panel that oversees the companies, characterized the changes as the administration kicking the can down the road and avoiding crucial policy decisions.

As part of the new terms, Fannie Mae and Freddie Mac will be required to reduce their investment portfolios at an annual rate of 15 percent instead of the previous 10 percent. That will put each of them on track to cut their portfolios to a targeted $250 billion in 2018, four years earlier than planned.

Fannie Mae's investment portfolio, valued at $673 billion as of the second quarter, holds distressed loans and mostly mortgages that were originated before 2008. Freddie Mac's investment portfolio was valued at $581 billion as of June.

During the years of the housing boom, their portfolios generated enormous profits.

NOTE; How can they borrow money from the treasury to make payments to the Treasury to pay back the loans from the taxs of the people?''This must stop!''Come Jan.1st the people own freddie and fanny. And at the same time come Dec.21 the Federal Reserve will loose its 99 yr contract to print the US Dollar. Rev.Josh

Unemployment rates rose in July in almost every state, including those where the presidential election fight is expected to be fiercest, according to data released on Friday by the Labor Department.

Altogether, jobless rates rose in 44 states. Rates dropped in Idaho, Rhode Island and the District of Columbia, and were unchanged in four states: California, Hawaii, Ohio and Utah. (Click here for state-by-state rates.)

As the country moves closer to November's election day, voters' attention is squarely focused on the economy and a national jobless rate hovering above 8 percent.

Because of the unique U.S. political system in which states cast electoral votes for president, the contest between President Barack Obama and presumptive Republican nominee Mitt Romney is heating up in seven states where polling suggests voters are undecided.

In those states - Nevada, Florida, Colorado, Wisconsin, Ohio, Virginia and Iowa - jobless rates all rose or were flat in July. Nevada again had the highest rate in the nation at 12 percent, while Florida's 8.8 percent and Colorado's 8.3 percent were both at or above the July national rate of 8.3 percent.

In addition to being a perennial battleground state, Florida this year is home to the Republican convention where Romney will officially become the party's candidate.

 
Obama has been in office since the recession ended in mid-2009, and many consider the election a referendum on his performance on the economy. A majority of Americans view the economy as the most important issue facing the country, according to a recent Reuters/Ipsos poll.
 
Romney has hammered Obama about employment conditions. A recent Gallup poll found that 37 percent of Americans approve of Obama's job creation efforts, compared with 40 percent in February.
 
One of the victories Obama touts is the turnaround in Michigan, a state whose fortunes are tied closely to the automobile industry. In the 2008 election, Michigan consistently held the highest jobless rate in the country. Obama pushed through a bailout package for the auto industry during the height of the financial crisis.
 
Still, Michigan is considered a battleground state that is only leaning toward Obama. In July, its jobless rate shot up to 9 percent from 8.6 percent in June.
 
Iowa is considered a toss-up between Obama and Romney, and the president recently made a three-day visit there trying to energize the independents and Republicans he won over in 2008. Although the state's jobless rate remains low, it increased to 5.3 percent from 5.1 percent last month.
 
In North Carolina, the rate rose to 9.6 percent in July from 9.4 percent. The Democrats will hold their national convention to rally around Obama next month in the swing state, which is expected to go to Romney.
 
July's rate was 8.3 percent in Arizona, 8.2 percent in Indiana and 7.2 percent in Missouri - also all battlegrounds expected to vote for Romney.
 
Unemployment rates can rise because more people, encouraged by glimmers of an improving economy, re-enter the workforce. That type of hope, though, was not apparent in most of the states, said Philippa Dunne and Doug Henwood, editors of The Liscio Report, an economic newsletter.
 
"Of those states reporting statistically significant increases, only four - Alabama, Georgia, Nevada and Pennsylvania - reported increases in their labor forces, which can mean job-seekers were more hopeful about their prospects," they said.
 
"In the big states of Florida, Indiana, Michigan, Virginia and Wisconsin, labor force contraction was accompanied by increases in the number of unemployed, so those increases were of the nasty kind."
 
Still, for most states, jobless rates are following a downward line. Compared with a year ago, unemployment rates dropped in 44 states and the District of Columbia, and rose in four.
 
Nonfarm payroll employment grew in 31 states in July and shrank in 19, the Labor Department said. California added the most jobs, at 25,200, followed by Michigan at 21,800, and Virginia at 21,300. New Jersey lost the most jobs at 12,000, followed by Missouri at 7,700, and Illinois at 7,100. 

NOTE; We need to remember the actual number is 3X's what they are telling, average is 25%, same as in Europe. Rev. 

(Updated 7:51 p.m. Eastern) NEW YORK -- Standard Chartered Plc will pay $340 million to New York's bank regulator over transactions linked to Iran, in a speedily arranged deal likely to cheer its shareholders.

The deal with New York Superintendent of Financial Services Benjamin Lawsky still left the British bank facing a separate probe of Iran-linked transactions by other U.S. authorities.

The deal on Tuesday capped a week of transatlantic tension and a furor over why a state agency had upstaged the other authorities.

The resolution also averted a hearing on Wednesday at which the bank had been called to demonstrate why its license to do business in New York should not be revoked.

Ian Gordon, an analyst at Investec Securities in London, said that the risk of further regulatory costs "appear sufficiently contained" to allow the bank's shares to build on a rally from their lows after Lawsky brought his case last week.

"Standard Chartered's management team have conducted themselves admirably in the face of extreme provocation," Gordon said.

The bank's shares rose 2.74 percent to close at 1,370 pence on Tuesday, before Lawsky's announcement.

Lawsky on August 6 called Standard Chartered a "rogue institution" that had broken U.S. sanctionson Iran, saying it hid Iran-linked transactions with a total value of $250 billion from regulators.

Lawsky's order came like a bolt from the blue, the bank said, hitting its share price and bringing top executives hurrying back to London from vacation. Bank of England Governor Mervyn King said that Lawsky was out of step with other U.S. authorities. And Standard Chartered Chief Executive Peter Sands strongly denied the allegations, saying illegal transactions totaled less than $14 million.

In his announcement on Tuesday, Lawsky said the bank had "agreed that the conduct at issue involved transactions of at least $250 billion." But he gave no details on what protections the deal gave Standard Chartered. (http://link.reuters.com/faq99s)

Standard Chartered confirmed that the two sides had reached an agreement, including the payment of $340 million, and said detailed terms would be concluded soon.

"It was a pragmatic decision in the best interest of shareholders and customers," a spokesman for the bank said.

In addition to the civil penalty, Lawsky said the bank agreed to an outside monitor for at least two years to check on controls on money-laundering at its New York branch.

Lawsky's aggressive stance heightened his public profile just months after the Department of Financial Services, the agency he heads, was created out of the state's banking and insurance regulators.

Within minutes of the announcement, New York Governor Andrew Cuomo lauded the "effectiveness and leadership" of the new agency.

"New York needed a tough and fair regulator for the banking and insurance industries to protect consumers and investors," Cuomo said.

But Lawsky has also drawn fire by jumping ahead of a two-year probe into Standard Chartered by the U.S. Treasury, the Federal Reserve, the Justice Department, and New York prosecutors.

"It's very unfortunate this wasn't done as a global state and federal settlement," said Ed Wilson, a former senior attorney at the U.S. Treasury Department.

As negotiations with Lawsky progressed last week and this week, the bank held separate talks with other authorities. It had hoped to land a deal on both fronts, but Lawsky's solo announcement Tuesday made clear that had not happened.

Underscoring a continuing divide with Lawsky, the other authorities issued short statements saying they would continue to work together.

"Treasury will continue working with our state and federal partners to hold Standard Chartered accountable for any sanctionable activity that may have occurred," the Treasury Department said.

The U.S. Federal Reserve said it "continues to work with the other agencies on a comprehensive resolution."

The Justice Department defended its record in fighting money laundering and said it was working with its regulatory and other partners "to determine what actions might be appropriate in this matter."

The Manhattan district attorney's office also said it would continue to work with its partners on sanctions violations.

Jimmy Gurule, a former undersecretary for enforcement at the Treasury Department who is now a law professor at Notre Dame, said Lawsky may have acted out of frustration that federal regulators were moving too slowly.

"I think, in part, there was probably some exasperation, some frustration on the part of the New York state regulators of federal regulators," Gurule said.

In the end, Lawsky's office won a settlement that was on par with fines paid by a handful of other banks that had improperly done business with sanctioned states such as Iran and Cuba. In 2010, Barclays Plc paid $298 million to settle a joint probe with federal and New York authorities.

Lloyds Banking Group and Credit Suisse Group have previously agreed to pay settlements of $350 million and $536 million, respectively. ING Bank NV paid a settlement of $619 million. HSBC HoldingsPlc currently is under investigation by U.S. law enforcement, according to bank regulatory filings. 

NOTE; To me it looks as though they are letting them go, to continue there scandals and the regulators of the so called gov't. get a slice of the pie. this dosn't salve our problems. They have to be brought to trail and dismantled as a large bank. The Banksters of the DC must not be allowed to continue. Adonai

George Frey / Getty Images file

Mormons walk past the historic Mormon Salt Lake Temple as they attend the 182nd Annual General Conference of the Mormon Church on March 31 in Salt Lake City, Utah.

SAN FRANCISCO -- If the Mormon church were a business, wealthy adherents like Mitt Romney would count as its dominant revenue stream. 

Its investment strategy would be viewed as risk-averse. 

It would also likely attract corporate gadflies protesting a lack of transparency. They would call for less spending on real estate and more on charitable causes to improve membership growth -- the Mormons' return on investment. 

Those are a few of the conclusions that can be drawn from an analysis of the church's finances by Reuters and University of Tampa sociologist Ryan Cragun.

Relying heavily on church records in countries that require far more disclosure than the United States, Cragun and Reuters estimate that the Church of Jesus Christ of Latter-day Saints brings in some $7 billion annually in tithes and other donations. 

It owns about $35 billion worth of temples and meeting houses around the world, and controls farms, ranches, shopping malls and other commercial ventures worth many billions more.

The church claims 14 million members around the world, more than half outside the United States. All are supposed to tithe, or give 10 percent, of their income, which Mormons frequently interpret as pre-tax earnings. But only about 40 percent of Mormons counted by the church actually attend weekly services in the United States and Canada, and in many countries, including Mexico and Brazil, only a quarter of nominal members are active, according to Cumorah, an independent research group headed by a devoted, active Mormon. 

These active members are most likely to tithe, and the result is that from a financial standpoint at least, the church remains largely a venture of active American members, said Cragun, who adds that U.S. Mormon men tend to be wealthier than the average U.S. male.

"Most of the revenue of the religion is from the U.S., and a large percentage comes from an elite cadre of wealthy donors, like Mitt Romney," said Cragun. "(It) is a religion that appeals to economically successful men by rewarding their financial acuity with respect and positions of prestige within the religion." 

The church is full of successful businessmen, including chemical billionaire Jon Huntsman Sr., the father of the former presidential candidate, J.W. "Bill" Marriott Jr. and his hotel-owning family, and even entertainer Donny Osmond. 

Romney, the Republican presidential candidate, gave $4.1 million to the church over the past two years (amounting to 9.7 percent of his gross adjusted income, according to the two years' worth of tax returns he has released). He would tithe on his IRA, valued at as much as $102 million, only when he withdraws from it and pays taxes. 

Crunching the numbers
Several countries around the world require religious groups and charities to file financial reports, including Canada. The country has only 185,000 Mormon members but a wealth of statistics on them. Taking total reported Canadian donations and dividing by the estimated number of active Mormons and family financial data from the World Bank indicates that active Canadian Mormons give slightly less than 8 percent of their income to the church. 

Assuming that active U.S. Mormons give at a similar rate and adjusting for higher U.S. income, total U.S. tithing would amount to more than $6 billion, or about $6.5 billion annually between the United States and Canada. 

Australia, Hong Kong, New Zealand and the United Kingdom, which also require financial disclosures, all have sharply lower donation rates than Canada. Based on data from those countries, tithing outside the United States and Canada totals several hundred million dollars, taking global total donations to about $7 billion. 

Canada also requires the church to disclose the value of its assets and spending. Using those figures as a basis suggests the total value of church buildings, including temples and meeting houses, would be about $35 billion globally.

Church spokesman Michael Purdy declined to comment specifically on the estimates but said that the church was different from a corporation. 

"Other projections are speculative and do not reflect an understanding of how the church uses its income to bless the lives of people," he added, saying the church was financed primarily from member tithing and offerings.

Focus on business and buildings
Concerned or disgruntled current and former Mormons complain that the church spends too much on real estate and for-profit ventures, neglecting charity work. 

The Mormon church has no hospitals and only a handful of primary schools. Its university system is limited to widely respected Brigham Young, which has campuses in Utah, Idaho and Hawaii, and LDS Business College. Seminaries and institutes for high school students and single adults offer religious studies for hundreds of thousands. 

It counts more than 55,000 in its missionary forces, primarily youths focused on converting new members but also seniors who volunteer for its nonprofits, such as the Polynesian Cultural Center, which bills itself as Hawaii's No. 1 tourist attraction, and for-profit businesses owned by the church. 

The church has plowed resources into a multi-billion-dollar global network of for-profit enterprises: it is the largest rancher in the United States, a church official told Nebraska's Lincoln Journal Star in 2004, with other ranches and farms in Mexico, Brazil, Argentina, Australia and Great Britain, according to financial documents reviewed by Reuters. 

Ranching and farm industry sources say they are well-run operations.

It also has a small media empire, an investment fund, and is developing a mall across from its Salt Lake City headquarters, which it calls an attempt to help revitalize the city rather than to make money. These enterprises are also part of a vast nest egg for tough times. The church expects wars and natural disasters before Christ returns to Earth in the Second Coming, and members are encouraged to prepare by laying in stores of food. Farms and ranches are part of the church's own preparation. 

"The church teaches its members to live within their means and put a little money aside for life's unexpected events. As a church, we live by the same principle," Purdy said. The rainy-day fund and operating budget rarely mix, officials say. 

Cost-cutting is a top priority, church documents show. It has even laid off janitors and called on members to clean temples and meeting houses, but the buildout of temples continues, including one under construction in Rome. 

Those temples take a lot of money to operate, Purdy points out, and many of the grand church buildings are short on congregants, says David Stewart, a physician who leads the research group Cumorah.

"I have been to beautiful church buildings in Hungary and Ukraine, and Latvia and other places, and there are these huge buildings and 35 people there, and you say, how can this work financially? The math - it just doesn't work."

In contrast, the Seventh-day Adventist Church, which had about 17 million members a year ago, appears to be getting a better return on investment: It builds smaller meeting houses and lots of schools and hospitals, and its numbers are swelling faster than the Mormons', said Stewart. The Adventists claim a million new members join annually, compared with every three years or so for the Mormons. 

"The Seventh-day Adventists clearly have a much more expansive humanitarian project in terms of building hospitals and medical schools and schools and universities and long-term developmental infrastructure around the world," said Stewart. "It's paid off for them." 

The Mormon church, meanwhile, appears to be decreasing transparency and member control of donations. New tithing slips give fewer donation options and come with an expanded disclaimer saying the church has sole discretion over spending, even though it will make "reasonable efforts" to follow donors' wishes. 

"Hey, where's the slot of 'shopping malls'?" a poster said of the new slips on exmormonforums.com, one of several dissident sites. 

Many faithful have no such issues. On chat boards and in private conversations, they emphasize that volunteering for the church and giving to it are worthy deeds in and of themselves. 

"The funds are used to build and maintain temples and meeting houses, as well as take care of the many expenses associated with helping the work of the Gospel of Jesus Christ roll forth. I love to pay tithing," Carl Ames said on one church site.

Purdy did offer a list of spending priorities: building houses of worship, supporting Brigham Young University and a seminary system, operating nearly 140 temples and the world's largest genealogy research program, and humanitarian aid for both members and non-members. 

Since 1985 the church has spent a total of $1.4 billion on relief for disasters such as Japan's earthquake and Ethiopian famine, and it operates 129 "bishops' storehouses" with food and household items for the needy.

Romney himself focuses on the act of giving, not the result. As he told Fox News Sunday, "Hopefully, as people look at various individuals running for president, they'd be pleased with someone who made a promise to God and kept that promise."

WASHINGTON - U.S. House Republicans filed a federal lawsuit on Monday against Attorney General Eric Holder, the country's top law enforcement official, seeking to obtain documents on a botched operation nicknamed "Fast and Furious" that sought to link Arizona gun sales to Mexican drug cartels.

The suit likely means the debate over the anti-gun-trafficking operation will go on for months, lasting through the Nov. 6 elections when Democratic President Barack Obama faces Republican challenger Mitt Romney.

Republicans' focus on Fast and Furious has helped to energize gun owners, who are a large and important voting bloc in presidential swing states such as Pennsylvania and tend to vote Republican.

The suit asks for documents Republicans say are critical to their investigation of the operation, but Obama has claimed executive privilege. In June, the Republican-controlled House of Representatives voted to hold Holder in contempt for withholding the documents.

House Speaker John Boehner, a Republican, said the lawsuit was necessary because the Obama administration was "stonewalling."

Justice Department spokeswoman Tracy Schmaler said the department, which Holder runs, was "always willing to work with the committee."

"Instead the House and the committee have said they prefer to litigate," she said.

GOP prepares to file lawsuit against Holder

House Minority Leader Nancy Pelosi called the lawsuit a waste of taxpayer money.

"This partisan lawsuit wastes taxpayer dollars and resources, and is a distraction from the urgent business before Congress: acting to create jobs and grow our economy," Pelosi said in a statement. "It is also designed to distract the Justice Department from its critical job of challenging state laws designed to restrict the rights of Americans to vote."

Some legal analysts said it should not have taken more than six weeks from the June 28 contempt vote for Republicans to file their suit. Basic elements of the case were contained in the House's citation for contempt, they said.

"Frankly it suggests that they don't expect to win quickly," said Charles Tiefer, a law professor at the University of Baltimore and a former House acting general counsel.

It will take months for the case to work its way through the U.S. District Court and any appeals process that might follow, legal analysts said.