"That's the top end of the range," said James Lockhart, director of the Office of Federal Housing Enterprise Oversight, in an interview on Thursday, the report said.
NEW YORK (Reuters) - Fannie Mae's <FNM.N> and Freddie Mac's <FRE.N> regulator will allow the mortgage financiers to raise as much as $20 billion in capital as part of an agreement that lets them buy more debt securities, Bloomberg News said on Friday.
"That's the top end of the range," said James Lockhart, director of the Office of Federal Housing Enterprise Oversight, in an interview on Thursday, the report said.
The capital may take the form of common shares, preferred shares, or convertible preferred shares, and will need to be raised "sooner rather than later," Lockhart said.
Fannie Mae and Freddie Mac must raise the money before OFHEO approves a further cut in the amount of capital they need to protect against losses on some $5 trillion of mortgage investments, Lockhart said.
!ADVERTISEMENT!On March 19, OFHEO lowered the capital threshold to 20 percent from 30 percent, allowing Fannie Mae and Freddie Mac to buy up to $200 billion of mortgage-backed securities and help support a shaky market for housing and home loans.
In the fourth quarter, Fannie Mae raised $7 billion from selling preferred stock, while Freddie Mac raised $6 billion.
In Thursday trading, Fannie Mae shares closed at $27.97, while Freddie Mac shares closed at $27.08.
(Reporting by Jonathan Stempel; Editing by David Cowell)
