NEW YORK (Bloomberg) - US Treasury Secretary Henry Paulson won endorsements from some of the world's biggest investors for his decision to seize control of Fannie Mae and Freddie Mac.

Pacific Investment Management Co.'s Bill Gross, manager of the world's largest bond fund, said Mr. Paulson took "necessary steps" to put the companies into a government-operated conservatorship. Billionaire investor Warren Buffett said Mr. Paulson "did the exact right thing," while central bankers in Asia, among the largest buyers of Fannie and Freddie debt, said they supported the decision.

Mr. Paulson on Sunday placed Washington-based Fannie and Freddie of McLean, Virginia, under the control of their regulator, ousting their CEOs and eliminating their dividends. The Treasury chief said the government may purchase as much as $200 billion of preferred stock in the companies and will start buying mortgage securities to shore up the debt and stem a slide in home prices.

"They've taken some necessary steps and it's obvious they've opened up their wallet," Mr. Gross said in an interview on Bloomberg Television yesterday. The purchases may help reduce house price declines by as much as four percentage points and lower yields on mortgage-backed securities, he said.

Mr. Gross had pushed the government to intervene, saying last week that the Treasury needed to start using more of its money to support markets to stem a burgeoning "financial tsunami".

As part of the plan Fannie and Freddie will have to reduce their portfolios including mortgages and securities backed by home loans to $250 billion each from more than $700 billion each at the end of July.

Mr. Paulson "did the exact right thing", by taking control Mr. Buffett, chairman and chief executive officer of Berkshire Hathaway Inc., said in an interview on CNBC yesterday. "I don't think there was an alternative that was anywhere close to this one, in terms of providing an ongoing function for the two."

Berkshire Hathaway, based in Omaha, Nebraska, had been among the biggest holders of Freddie shares until about 2001.

"This is positive," People's Bank of China Governor Zhou Xiaochuan said to reporters in Basel, Switzerland, at a meeting at the Bank for International Settlements. Bank of Japan Governor Masaaki Shirakawa said he expects the takeover to "stabilize" US and global financial markets.

Some central banks were concerned that the two companies' portfolios were too large, in part because of the size of their mortgage holdings, Mr. Paulson said in an interview with Bloomberg television yesterday.

Mr. Paulson, who took the helm of the Treasury in 2006 after a 32-year career at Goldman Sachs Group Inc., described the discussions to prop up the two mortgage finance companies as "all consuming". For the "first time in my career I had trouble sleeping, and it wasn't because it was a difficult decision", he said in the interview.

Mr. Paulson said that while he preferred not to oversee a government takeover, in the end there was no choice.

"Government intervention is not something that I came here wanting to espouse, but it sure is better than the alternative," the Treasury chief said.

Together, Fannie and Freddie own or guarantee almost half of the $12 trillion in US home loans outstanding. The government-chartered companies recorded almost $15 billion in combined net losses over the past four quarters as mortgage delinquencies climbed to record levels.