July 12, 2008

Fannie Mae, Freddie Mac Are Sound; Panic Unwarranted, Dodd Says

Fannie Mae, Freddie Mac Are Sound; Panic Unwarranted, Dodd Says

By Romaine Bostick

July 11 (Bloomberg) -- Fannie Mae and Freddie Mac are sound, have several options for capital and liquidity, and the ``facts don't warrant'' the negative reaction by investors, Senate Banking Committee Chairman Christopher Dodd said.

``There is sort of a panic going on, and that is not what ought to be,'' Dodd, a Democrat from Connecticut, said at a press conference in Washington today. ``Fannie Mae and Freddie Mac were never bottom feeders in the residential mortgage market.''

Dodd said options for the two largest U.S. mortgage-finance companies include using the Federal Reserve's discount window. He said the Fed and the Treasury Department are considering a ``number of options.''

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