Fannie, Freddie Portfolios To Eventually Fall To $250 Billion - FHFA
January 27 2009 - 3:43PM
Dow Jones News
Fannie Mae (FNM) and Freddie Mac (FRE) will be allowed to
increase their mortgage holdings to a maximum of $850 billion
through the end of the year before their regulator requires them to
eventually reduce their portfolios to $250 billion, under an
interim final rule published Tuesday by their regulator.
The new requirements, issued by the Federal Housing Finance
Agency, are in line with the agreements between the agency and the
Treasury Department announced in September when the federal
government took control of the two firms.
FHFA said in a statement that the two government-sponsored
enterprises would be allowed to increase their mortgage holdings to
$850 billion through Dec. 31 of this year. Beginning on Dec. 31,
2010, however, the two firms will have to reduce their mortgage
portfolios by at least 10% annually until the assets reach $250
billion.
The rule is subject to a 120-day comment period. FHFA said it is
seeking comment on how to govern Fannie and Freddie's investment
portfolios when they are no longer under government controls, among
other matters.
Separately, the FHFA issued an interim rule for measuring the
capital levels at the 12 Federal Home Loan Banks. The agency said
the rule will set the standard for whether a bank is considered to
have adequate capital.
-By Michael R. Crittenden, of Dow Jones Newswires; 202-821-2159;
michael.crittenden@dowjones.com.
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