Since then the two GSEs have continued to support mortgage finance with Federal Reserve help. It has bought more than $1,000bn of their securities. The Obama administration doubled the amount of funds lined up to invest in Fannie and Freddie to $200bn each in March but deferred detailed discussion of their future to 2010.
However, on December 31 the administration's authority to increase the $200bn per firm without recourse to Congress expires, forcing it to decide whether to increase the amount first.
Fannie and Freddie have already drawn $112bn between them. Barclays Capital estimates Fannie will ultimately need $130bn and Freddie $100bn. But in a stress scenario Fannie would need about $180bn - close to the $200bn limit...
Tuesday, January 5, 2010
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