BOSTON (Thomson Financial) - The Federal Housing Finance Board said Monday
it has authorized federal home loan banks to increase their purchase of agency
mortgage-backed securities (MBS), effective immediately.
Pursuant to the resolution, the FHFB said the limit on federal home loan
banks's MBS investment authority would increase from 300% of capital to 600% of
capital for two years.
The expanded authority is limited to Fannie Mae and Freddie Mac securities,
the FHFB said, and could provide "well in excess" of $100 billion of additional
liquidity to the MBS market.
Shares of Fannie Mae, a Washington-based mortgage lender, slipped 2% to
$33.64.
Freddie Mac shares also dipped 1.8% to $32.02.
Greg Saulnier
gs/vj
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