Fannie Mae, Freddie Mac Will Clear Their Swaps -Overseer

Dow Jones reports:

An official at the Federal Housing Finance Agency said Thursday that Fannie Mae (FNM) and Freddie Mac (FRE) will clear a large portion of the swaps on their books "in months" even if Congress fails to pass a bill to mandate central clearing.

"If there is no legislation, Fannie Mae and Freddie Mac are still going to go to central clearing," said Martha Tirinnanzi, the head of a clearing workgroup in the FHFA's office of market risk.

"We see that as the outcome of 2008. It is the responsible thing to do and the right thing to do. It is the right thing to do for our country and it is the right thing to do for Fannie Mae and Freddie Mac," she added during a conference held by the Futures Industry Association.

The FHFA is the regulator of Fannie and Freddie, the two large government- controlled suppliers of funding for home mortgages.

Both government-sponsored enterprises are major players in the interest rate swap market, which they use as a hedging tool against interest rate fluctuations.

No word from Rahm Emanuel(Democrat-Freddie Mac) on this one.