Fairholme proposes to buy insurance businesses of Fannie, Freddie

UPDATE: Bruce Berkowitz was on CNBC discussing this HERE.

Thanks to Will for passing this along. 

(Reuters) - Fairholme Capital Management has proposed to buy the insurance businesses of Fannie Mae (FNMA.OB) and Freddie Mac (FMCC.OB), a move that seeks to resolve the uncertain future of the mortgage financiers by freeing them from U.S. government control.

Bruce Berkowitz's Fairholme said it wants to buy the mortgage-backed securities insurance businesses of Fannie and Freddie by bringing in $52 billion in new capital.

The recapitalization plan seeks to raise about $34.6 billion in exchange for preferred stock, and at least $17.3 billion from preferred stockholders in a rights offering.