GSE Risk-Based Capital Rules are Ineffective, Regulator Says in Urging Legislative Overhaul
July 27, 2006
The current rules that govern the capitalization levels of Fannie Mae and Freddie Mac are fundamentally inadequate, according to the safety and soundness regulator of the two mortgage giants. Speaking at a mortgage industry event in Washington, DC, this week, James Lockhart, the director of the Office of Federal Housing Enterprise Oversight, said his agency’s risk-based capital rules for Fannie and Freddie need to be substantially revised. …