Fannie-Freddie Watchdog Demands Capital Above $280 Billion
- FHFA releases final rule that is key to ending U.S. control
- Biden’s win threatens plans to end conservatorships quickly
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Fannie Mae and Freddie Mac will be required by their regulator to hold hundreds of billions of dollars in capital to protect against losses, a step considered crucial to freeing the mortgage giants from U.S. control.
The Federal Housing Finance Agency rule finalized Wednesday stipulates how much of a capital cushion the companies would have to maintain against their assets as fully private entities in order to weather a financial crisis. The combined total could exceed $280 billion, and Fannie and Freddie would likely need to sell shares and retain earnings for years to raise the funds.