Fannie Mae Prepared for 2008

Fannie Mae’s Chief Executive Officer Daniel Mud announced today that they had enough capital to weather a negative housing market through 2008.

This announcement comes as Fannie Mae had to cut dividends 30% on the 4th to make sure it was able to free up assets in 2008. The dividend cut gave Fannie Mae necessary “incremental extra capital” to manage its business of guaranteeing mortgages securities.

Mudd also stated that Fannie Mae is “being conservative, keeping dry powder, preparing for a pretty long winter, a long 2008 and then some recovery.” Another addition to the capital increase by cutting dividends this month was Fannie Mae’s expected fee increase which is set to happen in March of 2008.

To read more about Fannie Mae preparing for long winter and 2008 head on over to Reuters.