From Bloomberg.com:
March 19 (Bloomberg) — Fannie Mae and Freddie Mac agreed to expand their purchases of U.S. mortgages and related securities after the Bush administration reduced the amount of capital the companies are required to hold as a cushion against losses.
The government-sponsored enterprises had their biggest two- day gains on record in New York Stock Exchange trading as their surplus capital requirement was cut to 20 percent from 30 percent by the Office of Federal Housing Enterprise Oversight. The companies, the largest sources of money for U.S. home loans, also agreed to raise a “significant” amount of new capital.
The goal is to “help restart the housing engine that powers our economy,” Fannie Mae Chief Executive Officer Daniel Mudd said at a news conference in Washington today. Freddie Mac CEO Richard Syron added: “This is what the GSEs were put in place for, to deal with situations like this and we will deliver.” continue reading
