WASHINGTON — Though a just-released capital rule for Fannie Mae and Freddie Mac will not be enforced until September 2002, the Office of Federal Housing Enterprise Oversight on Thursday said it plans to announce early next year how the mortgage giants would fare under it.

The 576-page rule was unveiled Thursday but will not be published in the Federal Register until early September, and by law it may be enforced only a year from that date. Still, OFHEO Director Armando Falcon Jr. said that he would reveal in February or March how well the two government-sponsored enterprises meet the rule’s requirements by plugging their fourth-quarter results into the rule’s computer code for calculating capital.

Doing so would in effect force Fannie and Freddie to comply with the rule early, because they will not want to be perceived as undercapitalized. “I think the two will do what is necessary to make sure they are in compliance when these first numbers come out,” Mr. Falcon said in an interview Thursday.

The rule was mandated by a 1992 law that requires Fannie and Freddie to have enough capital to withstand a 10-year period of severe economic stress in the housing and credit markets. To do that, the new rule creates a complex computer code that assesses the riskiness of each enterprise’s assets and activities.

If Fannie or Freddie fall short, they can raise capital, retain earnings, or lower risk. OFHEO’s enforcement options include dividend suspensions and changing management.

Both Fannie and Freddie had a subdued reaction to the rule’s release; officials from both companies said they needed time to look at it before making any substantive comments.

Still, a spokeswoman for Freddie said she would not object to OFHEO releasing the results of a test run early next year. “It is a very reasonable approach, and very responsible for them to run it. By that time, we will have had the test for a full quarter, and it gives us time to make sure it works.”

The two GSEs denied that they are trying to drum up opposition to the capital rule in Congress, calling such accusations by critics “absolutely untrue.”

FM Watch, a group of mortgage industry representatives who have been critical of Fannie and Freddie in the past, accused them of attempting to slip a provision into a Housing and Urban Development-Veteran Affairs appropriations bill that would delay the rule’s enforcement.

Mr. Falcon said that he had heard rumors of such a push, but that Senate staffers had assured him it was not true. He also said he hopes finally finishing the rule would derail the legislative effort to abolish OFHEO and shift oversight of Fannie and Freddie to the Federal Reserve Board.

“It would be a mistake to disable the agency given what we’ve accomplished and the team of people we’ve established here,” he said. “I hope that rather than investing time and effort in radically restructuring oversight of the enterprises, Congress will focus instead on how do we enhance what we have in place already.”

He said one of his priorities, other than the smooth implementation of the capital rule, is streamlining the agency’s structure, removing it from the appropriations process, and strengthening its independence.

However, Rep. Richard H. Baker, who chairs the subcommittee responsible for GSE oversight, is not convinced that the agency should continue to exist.

“Not only do we need a stress test, we need a strong regulatory capacity to enforce it,” the Louisiana Republican’s spokesman said Thursday. “Rep. Baker still calls for an entirely new regulatory structure.”


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