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by CareyBot

Mortgage repurchaser Fannie Mae said Tuesday it would issue $7 billion in preferred stock to raise capital and reduce the company's quarterly common stock dividend beginning in the first quarter of 2008. Fannie Mae on Nov. 9 reported $1.4 billion in third-quarter losses, but said it had $41.7 billion in core capital on hand, $2.3 billion above minimum requirements set by the Office of Federal Housing Enterprise Oversight (OFHEO). In a press release Tuesday, Fannie Mae officials said the preferred stock issue -- along with a smaller $500 million issue last month -- will help the company maintain a solid capital position through 2008. The additional capital will "strengthen Fannie Mae's ability to manage the effects of ongoing volatility in the mortgage credit markets, continue to grow its ...