Skip navigation
Watchlist Sponsored By :

Current DateTime: 05:02:18 12 Jul 2009
LinksList Documentid: 24355697
  • Highest Grossing Movies

      What are the highest grossing movies of all time, adjusted for inflation? Click ahead to find out!

  • Most Expensive Places To Live

      Each year, Mercer Consulting assembles its ranking of the most expensive places to live. Mercer compiles information from 143 cities worldwide.

  • Recession-Resistant US Cities

      Some cities have been hit much harder than others during the recession. Here are the metro areas faring the best.


Current DateTime: 05:02:18 12 Jul 2009
LinksList Documentid: 24890560
  • Boom, Bust and Blame

      The inside story of the economic crisis that has gripped the entire world.

  • E3: Gaming's Cutting Edge

      North America's premier computer and video game trade show draws tens of thousands of professionals to experience the future of interactive entertainment.

  • The Fall of GM

      A look into the fall of General Motors as the automaker heads toward bankruptcy and an effective nationalization.

Fannie, Freddie Near Deal to Boost Mortgage Buying
By: CNBC.com | 18 Mar 2008 | 11:33 AM ET
Text Size

Fannie Mae and Freddie Mac are near a deal that would increase their ability to ease tight credit by broadening their ability to buy mortgages being shunned by other investors, sources familiar with the talks said on Monday.

The deal would see the largest providers of funds for U.S. residential mortgages win relief from a capital surcharge that has constrained their growth, while also issuing new preferred stock, sources said.

"It would be a big step forward" for the companies and the markets, said Charles Lieberman, chief investment officer of Advisors Capital Management in Paramus, New Jersey.

"You are talking about the two biggest buyers of mortgages in an environment where mortgage products are relatively illiquid, and in need of buyers," he added.

The government-sponsored enterprises must hold 30 percent more capital than normal under a mandate imposed by their regulator after accounting scandals earlier this decade.

In recent weeks, policymakers in Washington have called for the companies to raise more capital in order to put more money into the housing market. Fannie Mae and Freddie Mac have resisted raising new capital as it would dilute the value of the companies.

But the financial crisis that on Sunday led to the fire-sale of No. 5 U.S. investment bank Bear Stearns Cos Inc. has underscored the gravity of the situation. Critics have raised pressure on the government to take unconventional measures to stabilize the banking system, especially since the economy appears to be sliding into recession.

A deal to boost GSE purchase and securitization activity "is important for the resumption of the re-opening of the credit markets," Lieberman said. 

Shares of Fannie Mae [FNM  Loading...      ()   ] rose 2.9 percent to $22.85 in extended trading after the close on Monday. Shares of Freddie Mac [FRE  Loading...      ()   ] gained 3.1 percent, to $21.25.

The sources said the GSEs and the Office of Federal Housing Enterprise Oversight were working out details about how much capital relief the companies would win and how much preferred stock they would be expected to raise.

Such a deal would likely be preferable to the Bush administration than giving the companies or their bonds direct support of the U.S. Treasury, which was rumored this month, an executive at a California-based mortgage lender said.

© 2009 CNBC.com
Tools:
Print EmailAdd This share icon


Current DateTime: 01:05:38 12 Jul 2009
LinksList Documentid: 29778428

Current DateTime: 01:05:38 12 Jul 2009
LinksList Documentid: 29779196

Current DateTime: 01:05:38 12 Jul 2009
LinksList Documentid: 29779199

Current DateTime: 01:05:38 12 Jul 2009
LinksList Documentid: 29779198
CNBCCNBC
About CNBC  |  Site Map  |  Privacy Policy  |  Terms of Service  |  Video Reprints  |  Advertise  |  Help  |  Contact
Partners: AOL Money  |  BloggingStocks.com
CNBC is a Division of NBC Universal
  Data is a real-time snapshot *Data is delayed at least 15 minutes
Global Business and Financial News, Stock Quotes, and Market Data and Analysis

© 2009 CNBC, Inc.  All Rights Reserved.
Thomson ReutersThomson Reuters