Bernanke wants Freddie, Fannie to aid housing market
- May 6, 2008
Federal Reserve Chairman Ben Bernanke is encouraging Freddie Mac and Fannie Mae to raise capital to help relieve the housing slump.
Bernanke said in a speech Monday that the government-chartered companies should raise more capital to aid the housing market, according to Bloomberg News. Bernanke warned that the rising foreclosure rates continued to threaten the economy.
The companies are already the largest purchasers of mortgages in the U.S.
On Tuesday morning, Fannie Mae reported a $2.19 billion loss for the first quarter of 2008, attributing it mostly to loss in credit markets. The company announced it is raising capital by cutting its dividend and hopes to raise $6 billion through stock offerings.
McLean-based Freddie Mac is expected to post a loss as well when it reports its finances next week.