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Feds give Fannie, Freddie access to capital

Crisis in confidence not affecting mortgage markets

Fears that the government might have to bail out Fannie Mae and Freddie Mac have sent the companies' share prices plummeting, but the turmoil in financial markets hasn't translated into higher mortgage rates or tightened underwriting standards. A contingency plan announced by federal regulators Sunday to provide Fannie and Freddie with access to more capital is aimed at calming investors in the companies, and the crisis may ultimately have little impact on mortgage lending or the housing downturn, analysts said. Shares of Fannie and Freddie began a precipitous decline last week, driven by fears that the privately traded, government-chartered companies would not be able to raise enough capital to stem losses on mortgages and mortgage-related investments (see story). The Federal Reserve Board announced Sunday that it would allow Fannie and Freddie to borrow money at the same rate banks are charged. The Treasury Department said it had approved an unspecified, temporary incr...

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