Enter multiple symbols separated by commas

Fannie, Freddie Loan Limits Won't Be Eased by Regulators

The government on Friday said it will not ease investment limits on home-loan finance giants Fannie Mae and Freddie Mac but didn't rule out an eventual increase.

Both Fannie Mae and Freddie Mac had argued that allowing them to take on more debt would help pump cash into the struggling mortgage market.

The announcement by the Office of Federal Housing Enterprise Oversight came at the end of a week of speculation that the regulators would allow the government-sponsored companies a wider investment berth. The companies' shares had soared on Wall Street in an otherwise skidding market.

In an interview on CNBC Thursday, Fannie Mae CEO Daniel Mudd said Fannie Mae is seeking regulatory approval to increase its lending limits in order to put more liquidity back in the mortgage market, which has been hurt by growing subprime lending troubles and tightening credit.

“We’re ready to start investing now," Mudd said. A lot of "people and institutions in the middle of the system" could benefit from the increased liquidity, he added, including subprime borrowers.

"The marketplace should have confidence that Enterprise securities are trading efficiently," said OFHEO director James Lockhart, in a prepared statement.

The Enterprises will remain active market participants and OFHEO will continue to closely monitor both the markets and the Enterprises' safety and soundness.

Contact U.S. News


    Get the best of CNBC in your inbox

    Please choose a subscription

    Please enter a valid email address
    To learn more about how we use your information,
    please read our Privacy Policy.

Don't Miss

U.S. Video

  • Hero miles for military members: Real estate magnate's plea

    Chairman of the Fisher House Foundation, Ken Fisher, discusses the Hero Miles program with CNBC's Dina Gusovsky. During Military Appreciation Month, Fisher is asking every traveler to donate 1,000 of their miles to replenish the Hero Miles programs that is in danger of running out.

  • Cramer shuts down this market's haters

    "Mad Money" host Jim Cramer on why this market can't stop, won't stop.

  • From the battlefield to the boardroom

    Your Grateful Nation is dedicated to helping Special Forces veterans enter the corporate world and Knot Standard provides complimentary suits to vets. Mad Money's Jim Cramer spoke with Rob Clapper, Your Grateful executive director; John Ballay, Knot Standard co-founder and president; Tej Gill, retired U.S. Navy Seal; and Darren McB, active duty U.S. Navy Seal.