U.S. regulators check Fannie, Freddie books: report

Bank examiners from the U.S. Federal Reserve and the Comptroller of the Currency are inspecting the books of mortgage finance companies, Fannie Mae and Freddie Mac, The New York Times reported on Tuesday.
The Fed and the comptroller's office began combing the books of the two largest U.S. home loan companies after their declining stock prices caused widespread anxiety in the market, the paper said, quoting Treasury Secretary Henry Paulson.
The move comes as the Bush administration prods Congress to approve a plan that would enable it to inject blns of dollars into the companies, which guarantee or own almost half of U.S. home loans.
Both Fannie Mae and Freddie Mac have an adequate cash cushion to withstand further declines in the housing market, Paulson told the New York Times.
The financial condition of the two companies is being followed closely by members of Congress, some of whom have expressed concern about approving a plan without a clearer understanding of the value of the possible losses from mortgage-related securities owned or guaranteed by them.
The financial health of the two companies is also important to the Fed and the comptroller because many of the banks they regulate hold Fannie and Freddie debt, the paper said.