Government-Sponsored Enterprise

Fannie, Freddie Face “Severe” Capital Pressures, Say Analysts 

(Update 1: expanded discussion of losses and the effect on GSE purchases; adds discussion of debt securities and FHA) Both Fannie Mae and Freddie Mac face strong capital pressures, even as a Federal regulator has eased up on prior limitations in an effort to boost liquidity in the mortgage-led secondary markets. According to a report published this week by analysts at UBS Investment Research, however, fresh efforts to deliver more capital to the GSEs would seem likely to do little to enable either company to have the sort of impact regulators and policymakers might otherwise hope.