Fannie Mae, Freddie Portfolio Limits to be Lifted

NEW YORK -- The regulator to Fannie Mae and Freddie Mac will remove limits on their $1.5 trillion mortgage portfolios, bringing an end to a restriction that hobbled their ability to provide financing for the housing market, Bloomberg News reported.

The cap, imposed in 2006 after the mortgage finance companies uncovered $11.3 billion of accounting errors, will end on March 1, the Office of Federal Housing Enterprise Oversight (OFHEO) said in a statement Wednesday, according to Bloomberg News. Fannie Mae Wednesday reported a $3.55 billion fourth-quarter loss and Freddie Mac plans to issue results Thursday, releases that OFHEO characterized as “timely,'' Bloomberg News reported.

OFHEO on Sept. 19 raised the portfolio limit at each company to $735 billion for the third quarter and granted a 2 percent increase over the next year, removing an obstacle to the expansion of their portfolios, Bloomberg News reported.

OFHEO also soon may ease requirements that Washington-based Fannie Mae and Freddie Mac of McLean, Va., hold 30 percent more capital than normal as they fix their book-keeping, according to the statement, Bloomberg News reported.

-- NYSSCPA.org News Staff

Posted on 2/27/08