Shares of Freddie Mac and Fannie Mae
were looking a little better in early trading on Tuesday after investors
fled the two government sponsored entities (GSEs) the previous day over
doubts that their underlying capital could make it more
difficult for them to buy or guarantee mortgages. That, in turn, could
make interest rates on new home mortgage loans rise sharply.
The concerns arose after Lehman Brothers reported that new
accounting rules might require that the two companies raise
billions in new funds.