WASHINGTON — The ability of Fannie Mae and Freddie Mac to raise capital — which hit rock-bottom last week — has been boosted by the Federal Reserve’s latest market intervention.
Drained by multibillion- dollar fourth-quarter losses, the country’s biggest mortgage-finance companies are thirsting for cash so they can play a bigger role in the struggling housing market.
But Fannie and Freddie, which together hold or guarantee about $4.9 trillion in home-loan debt, have had difficulty lining up buyers for their mortgage-backed securities amid tumbling home prices and rising foreclosures.
The Federal Reserve answered that call Tuesday by making available to Wall Street banks up to $200 billion in Treasury securities, with a twist — the agency will accept as collateral the types of securities Fannie and Freddie guarantee and sell to investors.
The company’s shares, which had fallen to fresh 52-week lows in recent days, climbed sharply.
Fannie’s stock jumped $2.19, or more than 11 percent, to $22. The shares have ranged over 52 weeks from $18.50 to $70.57.
Freddie shares gained $2.77, or nearly 16 percent, to $20.16. They have ranged from $16.59 to $68.12 over the past year.
Freddie didn’t return a call seeking comment. Fannie spokeswoman Marilyn Kornfeld declined to comment.
The Fed’s goal was to relieve some of the financial pressure on banks so they’ll be encouraged to lend more freely.
It wasn’t an explicit pledge by the government to back Fannie and Freddie, a move that was rumored last week on Wall Street to be coming. Those rumors were denied by the Treasury Department — but the Fed’s action brightened the companies’ outlooks.
