Reuters (03/12/08); Yoon, Al
Both Fannie Mae and Freddie Mac have more than enough capital to ride out the currently poor conditions in the mortgage market, confirms their regulator--the federal Office of Federal Housing Enterprise Oversight. According to the agency, Fannie Mae's core capital of $45.4 billion at the close of 2007 was $3.9 billion above its minimum level; while Freddie Mac's core capital of $37.9 billion exceeded the minimum by $3.5 billion. The capital requirements of the two government-sponsored enterprises were boosted following accounting scandals, but the mortgage financiers now want OFHEO to relax those mandates so that they can make bigger investments in the troubled mortgage market. The watchdog reports that it is considering the request and may gradually lower the requirement, provided that Fannie Mae and Freddie Mac satisfy safety and soundness barometers.
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