Lockhart: Fannie to Use Fresh Capital 'Profitably'

Loosening GSE Purse Strings

Financial markets expect Fannie Mae, the biggest provider of funding for U.S. home loans, can reverse losses by applying $6 billion in fresh capital toward profitable investments, the company's federal regulator told CNBC on Wednesday.

Fannie Mae shares rose 8.9 percent on Tuesday after the company reported its third straight quarterly loss, and said it would raise capital to cushion itself from losses and maintain its ability to support the mortgage market.

"I think the marketplace thinks the money will be put forth profitably," James Lockhart, director of the Office of Federal Housing Enterprise Oversight, said in the CNBC interview.