Friedman Billings Ramsey has downgraded Fannie Mae's stock to "underperform" because the giant mortgage company could be stuck with higher capital requirements and slower portfolio growth for two years.FBR analyst Paul Miller estimates that it could take Fannie "another two years" to become current in its financial reporting, while Freddie Mac is expected to become current by the end of this quarter. "For Fannie Mae, we believe portfolio growth will be limited to mid-single digits given continued restrictions on capital levels and management focus on restatement and becoming current in financial reporting," says a new FBR research paper. FBR reduced its 12-month price target for Fannie's stock to $44 from $65. At the same time, Mr. Miller increased the price target for Freddie's stock from $70 to $76, calling it an "outperform." The analyst said he expects Freddie's regulator to reduce its capital requirement in the first half of this year, which would allow for mid- to high-single-digit portfolio growth.

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