Fannie, Freddie CEOs, OFHEO, plan news conference
NEW YORK (Reuters) - The federal regulator of Fannie Mae (FNM.N) and Freddie Mac (FRE.N) on Tuesday said it would hold a news conference with chief executive officers of the largest providers of U.S. home funding on Wednesday.
The Office of Federal Housing Enterprise Oversight said Fannie Mae CEO Daniel Mudd and Freddie Mac CEO Richard Syron would participate at the conference expected to be held in Washington at 9 a.m. EDT. OFHEO announced the conference in an e-mailed statement to media.
Shares of the two government-sponsored companies soared on Tuesday on expectations they were near a deal with OFHEO that would allow them to expand their support of the mortgage market by billions of dollars.
At the close in New York, Fannie Mae's stock rose 27.06 percent to $28.22, marking the biggest one-day percentage gain in at least a quarter-century. Freddie Mac shares climbed 26.19 percent, the best percentage boost since 1988, to $26.02.
The negotiations involve rolling back the ratio of capital the companies must hold against their debt and mortgage guarantees, and a possible sale of preferred stock, sources familiar with the talks said on Monday.
Increased participation by Fannie Mae and Freddie Mac is expected to bolster confidence in a market where most investors are shedding risks. Selling of mortgage-related assets this year has worsened the credit crunch, which may be tipping the U.S. economy into recession.
But the companies, which hold charters from the government to support homeownership, are themselves struggling with losses due to falling home prices and record home foreclosures. Both recently boosted forecasts for their credit losses into 2009 after reporting combined net losses of $6.1 billion for the fourth quarter of 2007.
(Reporting by Al Yoon and Patrick Rucker; Editing by Marguerita Choy)
