Industry News

Fannie Mae slashes first-quarter dividend

Aims to increase capital

Fannie Mae on Tuesday cut the dividend on its common stock by half in order to meet a requirement for more cash reserves by regulators. The company declared first-quarter dividend of 26 cents per share. The Office of Federal Housing Enterprise Oversight, Fannie Mae's federal supervisor, approved payment of these dividends. "The Board of Directors believes that this is a prudent and responsible action to take as the company moves expeditiously to increase its capital," said Stephen Ashley, non-executive chairman of the Fannie Mae Board of Directors. Fannie Mae has submitted a capital restoration plan to OFHEO for its review and approval and is working with OFHEO to address any comments or concerns. "We look forward to continue working with OFHEO to attain the capital restoration plan," Ashley added. Reducing the common stock dividend will contribute toward building Fannie Mae's capital to a 30 percent surplus over its minimum capital requirement. On Dec. 21, 2004, OFHEO classifie...

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