Fannie Mae and Freddie Mac Capital Requirements Lowered to Help Mortgage Market

Capital Reserve Requirements Reduced

Fannie Mae and Freddie Mac's regulator unveiled a ten percent (10%) reduction from thirty percent (30%) to twenty percent (20%) of the capital reserves that the two (2) firms must maintain.  This should assist the mortgage industry by providing additional capital. 

Ofheo said the move could provide up to $200 billion dollars in immediate liquidity to the troubled mortgage-backed securities market. "We believe they can play an even more positive role in providing the stability and liquidity the markets need right now," Ofheo Director James Lockhart said in a statement.

Treasury Secretary Paulson lauded the move. "Additional capital will enable the companies to help more homeowners and will strengthen the underlying fundamentals of the mortgage market," he said.

William L. Exeter
President and Chief Executive Officer
EXETER 1031 Exchange Services, LLC
EXETER Fiduciary Services, LLC

Comment balloon 0 commentsBill Exeter • March 19 2008 10:22AM