Morgan Stanley reports that it has been retained by the U.S. Department of the Treasury to provide advice regarding Treasury’s handling of Fannie Mae and Freddie Mac.

As part of that assignment, Morgan Stanley will support the Treasury’s work to promote market stability and the availability of mortgage credit, it said. The firm is not being paid for the assignment, it will receive $95,000 from the government toward its expenses.

“Morgan Stanley is honored to have been asked to serve as financial advisor to the U.S. Treasury as it evaluates various alternatives for Fannie Mae and Freddie Mac,” said chairman and CEO, John Mack. “We are pleased to be able to offer our services to the government and look forward to working with Secretary Paulson and his team as they work to restore stability to the global capital markets and confidence in the U.S. housing market.”