Aug. 12 (Bloomberg) -- U.S. House Financial Services Committee Chairman Barney Frank said the Treasury will not have to come to the rescue of the two largest sources of U.S. mortgage financing, Fannie Mae and Freddie Mac.

``I don't think it's going to be necessary,'' he said in an interview today at a foreclosure-prevention workshop at Gillette Stadium in Foxborough, Massachusetts. ``Fannie and Freddie have survived housing better than a lot of other people.''

After Fannie and Freddie reported combined second-quarter losses of $3.1 billion last week, some investors predicted Treasury Secretary Henry Paulson will be forced to use powers provided by Congress last month to support the companies through capital injections or debt purchases. Government-chartered Fannie and Freddie account for almost half of the $12 trillion of U.S. residential mortgages.

``They have taken the worst shot they are going to take and it's going to get better,'' Frank said today. ``The future is going to be better for them than the past.''

Countrywide Financial Corp., acquired by Bank of America Corp., and Bear Stears Cos., acquired by JPMorgan Chase & Co., are examples of companies hurt more severely than Fannie or Freddie, Frank said.

JPMorgan's stock had its biggest decline in six years today after reporting a $1.5 billion loss on mortgage-backed assets in less than two months.

``It looks a lot better for Fannie and Freddie,'' Frank said. ``What we have given Hank Paulson is the equivalent of deposit insurance for Fannie and Freddie.''

Freddie's shares fell 23 cents, or 4.1 percent, to close at $5.37 on the New York Stock Exchange. Washington-based Fannie declined 38 cents to $8.02. Both have plummeted about 90 percent in the past year and are trading near 17-year lows set last month.

To contact the reporter on this story: Anthony Massucci in Foxborough, Massachusetts at amassucc@bloomberg.net.

Last Updated: August 12, 2008 19:43 EDT