WASHINGTON –As the Bush administration awaits congressional action on its proposal to give it more power to provide capital to Fannie Mae and Freddie Mae, the Federal Reserve and the Treasury Department's Office of the Comptroller of the Currency are examining the mortgage buyers' books.
Treasury Secretary Henry Paulson, who revealed the examinations during an interview with The New York Times, said the action was prompted by concerns about the health of Fannie and Freddie in the wake of their recent stock declines.
The housing bill scheduled to be voted on in the House tomorrow s a provision to give the Treasury Department the authority to lend money to and buy shares in Fannie and Freddie, should those mortgage buyers need the additional capital. Paulson has emphasized that he believes the mortgage buyers are adequately capitalized and has no plans to use the authority but wants it as an option should there be problems with Fannie and Freddie in the future.
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