Fannie Mae and Freddie Mac are well capitalized
Despite media reports, it’s not all bad news regarding mortgages these days.
Fannie Mae and Freddie Mac are adequately capitreaalized, according to the Office of Federal Housing Enterprise Oversight (OFHEO), which closely monitors Fannie Mae and Freddie Mac in an effort to promote a strong real estate market nationally. That means Fannie Mae’s and Freddie Mac’s capital exceeds what OFHEO requires (and OFHEO requires more than the statutory minimums).
James B. Lockhart, OFHEO director, issue a statement July 10, 2008, that said the companies have plenty of liquidity and have more than $1.5 trillion in assets that aren’t tied up.
Lockhart has made it clear to Fannie Mae and Freddie Mac that OFHEO will continue to vigilantly supervise their operations and will “act quickly to address any deficiencies that may arise.†OFHEO will also make sure the entities’ capital levels are strong.
Fannie Mae and Freddie Mac have created more than $19 billion in capital, including the $8 billion Fannie Mae raised in May to follow through with its agreement in March with OFHEO. The money will help the companies grow and lend more money to support the mortgage, and thus real estate market. Freddie Mac committed to raising an extra $5.5 billion, as long as market conditions are amiable.
Lockhart assures people that even though the economy and real estate market are slow, Fannie Mae and Freddie Mac have the assets they need to carry out their goals.
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