Wednesday, August 20, 2008

Analyst: Fannie/Freddie May Need a Combined Total of $100 Billion

Joshua Rosner, a top analyst at consulting and research firm Graham-Fisher, is out with a report that says Fannie Mae and Freddie Mac may need to raise as much as $100 billion combned, in order to cover potential losses on their mortgage portfolios.

Rosner's calculates are based on the two firms' roughly $3.5 trillion in mortgages guaranteed, and are based on peak losses of about 1.3 percent in the 2002-2003 a time frame when the housing market did not have anywhere close to the problems that exist currently. The estimate also assumes that mortgage insurers have the capital on hand to cover the first 20 percent of losses.

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