The last of the three major rating agencies has responded to recent actions by Fannie Mae's regulator by lowering certain Fannie ratings (rather than warning of possible downgrades, as the others did), thus bringing some ratings more in line with those of its peers.Approximately $17 billion in securities are affected by Fitch Ratings' downgrade of Fannie Mae's subordinated debt and preferred stock from AA to AA-minus, the rating agency reported. Fitch said it based its downgrade partly on the assumption that regulatory actions will "negatively impact profitability and reduce future financial flexibility" at Fannie Mae. In addition, Fitch also said it is concerned because Fannie's management "faces a number of regulatory and political matters as well as potential requirements to improve internal controls and enhance accounting systems."

Subscribe Now

Authoritative analysis and perspective for every segment of the mortgage industry

30-Day Free Trial

Authoritative analysis and perspective for every segment of the mortgage industry