Treasury: GSEs on 'Stable Footing'

Despite Fannie Mae posting a $29 billion third quarter loss, Treasury Secretary Henry Paulson believes the company - and its sister GSE, Freddie Mac - are on "stable" financial footing. At a press conference Wednesday, Mr. Paulson said in a few weeks he will share his "views" on the future of Fannie and Freddie. He noted that Fannie's third quarter loss was "in the range of what we expected." Meanwhile, FBR Capital Markets issued a report predicting that Fannie could post losses of $20 billion to $40 billion over the next four quarters. As reported, Fannie Mae executives recently said they are worried that the company's credit facility with the Treasury "may prove to be insufficient," noting that it could run into liquidity problems that would impair its ability to support the mortgage market.