The U.S. Treasury is supposedly surveying (and hopefully not just a certain 35-year-old rocket scientist we might mention) those looking to handle its $700 billion of soon-to-be-purchased mortgage assets. Among the bidders, guess which world-class money managers, including banks, are stepping up to the plate?

BlackRock Inc. and Pacific Investment Management Co. submitted proposals to manage troubled mortgage- backed securities in the biggest portion of the Treasury's $700 billion financial-rescue program, people familiar with the matter said.

State Street Corp. and Bank of New York Mellon Corp. bid to handle record-keeping and custody services for the Treasury, said the people, who asked not to be identified because the process is private. The deadline for proposals was yesterday at 5 p.m. New York time.

President George W. Bush last week signed into law a measure authorizing the government to buy mortgages and other distressed assets from financial institutions buried by record home foreclosures. The goal is to remove illiquid assets from the books of banks and securities firms, making it easier for them to raise capital and resume lending.

Companies must oversee at least $100 billion in U.S. dollar-denominated fixed-income assets for clients to compete for the contracts to buy and sell mortgage-backed securities under the plan, according to criteria released Oct. 6 by the department. Bidders to provide custody services must oversee at least $500 billion in investor assets.

The Treasury, which solicited proposals from asset- management firms on Oct. 6, said it plans to make its selection by next week.

Treasury spokeswoman Jennifer Zuccarelli declined to comment. In a speech yesterday, Secretary Henry Paulson said the department could begin to hire private firms by the end of this week.

The Treasury is "anxious" to begin buying mortgage assets, though it's unsure about how the plan will work, suggesting purchases will begin in six to eight weeks, UBS AG analysts said in an Oct. 7 report to clients.

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