NEW YORK, March 10 (Reuters) - The regulator of Fannie Mae and Freddie Mac on Monday joined the chorus of regulators and government officials suggesting that if the two companies raised more capital it would help the housing market.
Last week, Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson both said the government-sponsored enterprises, the two largest providers of U.S. residential mortgage funding, could do more to stabilize the mortgage finance market if they were to raise fresh capital.
“Each enterprise has sufficient capital at this time, but raising capital would put them in an even better position to support the mortgage market as will quick passage of comprehensive GSE reform legislation,” said the director of the Office of Federal Housing Enterprise Oversight, James Lockhart, in an e-mailed statement.
Officials are leaning on the GSEs to support the housing market. But the two recently reported multibillion dollar losses in the fourth quarter as the number of failing home loans have climbed.
Fannie Mae and Freddie Mac, chartered by Congress to raise money for home ownership, provide guarantees on mortgage-backed securities sold to investors. The companies fund a combined $1.4 trillion in investments in mortgages and mortgage securities in the separate agency debt market.
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