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Business Is Divided On Whether Fannie And Freddie Should Be Able To Build Capital


Housing and finance trade groups don't all agree on whether Fannie Mae and Freddie Mac should be allowed to build up capital.

Five major groups, including the American Bankers Association and the National Association of Realtors, sent a letter to Federal Housing Finance Agency Director Melvin Watt, asking him to to reject calls to approve measures that would allow it, the Wall Street Journal reports.

That conflicts with a letter sent earlier this year from the Community Home Lenders Association, the Community Mortgage Lenders of America and the Independent Community Bankers of America, which urged Watt to hold quarterly dividends both companies pay to the Treasury to allow them to build up capital.

Watt said earlier this year that reduced capital at Fannie and Freddie poses a “serious risk,” and with businesses divided, it looks like the battle over housing finance’s future is just heating up. [WSJ]