Wall Street Journal (03/10/08) P. A2; Hagerty, James R.; Wessel, David
Fannie Mae CEO Daniel Mudd is in the midst of his annual trip to speak with investors in Asia and Europe, and it comes at a time when concerns about rising mortgage defaults are generating concerns about the government-sponsored enterprises' financial health. There are worries that Fannie Mae and Freddie Mac would need to sell shares to U.S. and overseas investors to generate capital in the event of ongoing market deterioration, and while Office of Federal Housing Enterprise Oversight director James Lockhart says additional capital is not needed immediately, he believes it would better position them for propping up the mortgage market. Yields on GSE-guaranteed mortgage securities rose substantially in comparison to Treasury securities during the week ended March 7 due to distressed investors unloading the securities, and such a move boosted mortgage rates. Asian investors typically purchase up to 40 percent of the debt issued by Fannie Mae.
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