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Federal regulators relax capital requirements for Fannie Mae and Freddie Mac. The move could add $200 billion to the pool of money available for home loans.
By E. Scott Reckard and Maura Reynolds
March 20, 2008
Seeking to boost the economy by making mortgages cheaper and easier to get, the government said Wednesday that it would further ease the reins on Fannie Mae and Freddie Mac. The move is intended to make as much as $200 billion in additional money available for newly issued home loans.

But some experts said the action would do little to boost the housing market or help homeowners who were struggling with their mortgages and were unable to refinance.

The federal regulator of Fannie and Freddie, which buy home loans and guarantee bonds backed by mortgages, said it was reducing their required capital cushion against losses. The move could stimulate home purchases or refinances within a month or two, executives at the government-sponsored firms said.

The action by the Office of Federal Housing Enterprise Oversight followed steps taken by the Federal Reserve and the Bush administration to stabilize the financial system and jump-start the moribund housing and mortgage markets.

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Tags: , Mortgage News

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