Fed chief Ben Bernanke sees a big role for Fannie Mae (FNM) and Freddie Mac (FRE) in resolving the U.S. housing crisis. Speaking at a Columbia Business School dinner Monday night, Bernanke said the government-sponsored mortgage investors should “move quickly to raise significant new capital” to aid the housing market, Bloomberg reports. Bernanke also spoke in support of proposals that would have lenders forgiving parts of struggling homeowners’ loans and make Federal Housing Administration refinancings more widely available.

Calls for new capital at the big mortgage companies are nothing new. The director of Fannie and Freddie’s main regulator, James Lockhart of the Office of Federal Housing Enterprise Oversight, said in March that the companies may raise as much as $20 billion in new capital as part of a deal freeing them to expand their purchases of mortgage securities. The firms raised some $15 billion at the end of 2007 via preferred stock sales to replenish their coffers after two quarters of hefty losses tied to souring mortgages. Fannie Mae’s first-quarter earnings, due out Tuesday morning and expected to show a third straight quarterly loss, may offer a clue as to how much money the firms will need to raise.

Are Fannie Mae (FNM) and Freddie Mac (FRE) heading out on the fundraising circuit again? The big mortgage companies’ regulator, the Office of Federal Housing Enterprise Oversight, seems to be saying yes. OFHEO director James Lockhart tells Bloomberg in an interview published Friday that the companies may raise as much as $20 billion in new capital as part of last week’s deal freeing them to expand their purchases of mortgage securities. Fannie and Freddie raised almost $15 billion in new capital by selling preferred stock and cutting their dividends late last year, after hefty losses tied to souring mortgage markets depleted their cushions against future losses.

Lockhart’s comments come just two weeks after Freddie execs insisted they had enough capital to see their way through the housing mess. But that was before the government gave Fannie and Freddie and another government-sponsored entity, the Federal Home Loan Banks system, more leeway to buy mortgage-backed securities in a bid to support that market, which has been hit by the flight of risk-averse investors. News of the agreement, which also led OFHEO to pare back some capital surcharges on Fannie and Freddie, sent the companies’ shares soaring last Wednesday, as investors bet the move would boost revenue growth.

Fannie and Freddie will need to raise the capital “sooner rather than later,” Lockhart told Bloomberg this week. But for now, investors seem to be betting that sooner won’t be all that soon. Shares of the companies were down just 2% in midmorning action Friday.

Freddie Mac (FRE) is trying some damage control. With a wave of foreclosures sweeping American neighborhoods, the government-backed mortgage investor is reaching out to struggling homeowners. The company recently posted a video on YouTube showing how to avoid foreclosure scams, the Washington Post reports. Freddie says it’s trying to flag schemes in which thugs lure borrowers to sign away their home equity.

The move comes as a difficult year at Freddie nears a close. The company’s shares have lost half their value in 2007, as the decline of the housing market has saddled the company with big losses on souring mortgages. Last week, CEO Richard Syron predicted Freddie will repeat its $2 billion third-quarter loss in the fourth quarter.

Billions of dollars in coming credit losses aside, however, the company’s future “looks better and better,” he told investors at a Goldman Sachs conference. Indeed, Freddie’s outlook is so glossy that this weekend the company sprang for what one correspondent terms “a decadent holiday party,” according to Barry Ritholtz. As if shareholders haven’t paid for enough Freddie follies already.
 

Fannie Mae (FNM) is socking away money for what’s shaping up as a nasty year ahead. The government-sponsored mortgage investor said Tuesday afternoon it will sell $7 billion worth of nonconvertible preferred stock this month and slash its dividend by 30% to raise capital, the money it keeps on hand to cushion against possible losses. Fannie’s move comes just weeks after its sibling Freddie Mac (FRE) raised $6 billion in a preferred stock sale and slashed its dividend in half. Fortune’s Peter Eavis predicted today that  rising mortgage defaults would force Fannie to raise more money.

Fannie’s move is good for the long haul, as it shows the company is getting more realistic about the need to guard against rising losses as the housing market goes south. Still, the company’s comments about the fourth quarter and coming year are sobering.

“The company continues to believe that the worsening housing and credit markets, continued losses on certain guaranty contracts, substantial credit-related expenses, and fair value losses on derivatives and securities will adversely affect in a material way the company’s fourth quarter 2007 results,” Fannie said Tuesday. “In addition, the company continues to believe that conditions in the housing and credit markets, including expected further declines in home prices, will negatively affect the company’s financial condition, and results of operations in 2008. Overall economic conditions in 2008 could also materially affect future performance.” That seems like a winning bet right now.

More trouble for Fannie Mae (FNM). Fortune’s Peter Eavis reports the big government-sponsored mortgage investor could be looking at $5 billion worth of mortgage securities writedowns, based on how Fannie appears to be valuing those securities in comparison to where similar bonds are trading in the market. A big writedown could force Fannie into the market to raise billions of dollars in new capital, along the lines of what sibling Freddie Mac (FRE) did late last month, Eavis writes. Any concerns about Fannie’s capital position could put renew pressure on the shares, which have risen some 35% after they hit a low last month amid worries about the firm’s bookkeeping.

Meanwhile, some observers are wondering if Fannie and Freddie don’t stand to be the big losers in the mortgage bailout being arranged by Treasury Secretary Hank Paulson. The plan seems to hinge on mortgage bond investors accepting a decline in their expected interest payments — an outcome that could hurt Fannie and Freddie, the biggest holders of the triple-A-rated mortgage securities issued by Wall Street. If the bailout plan does hurt Fannie and Freddie, it will further inhibit their ability to keep the U.S. mortgage pipeline flowing — a scary thought for homeowners and investors alike.

The news of another financial-sector bailout, this time at E*Trade (ETFC), sent shares in Freddie Mac (FRE) higher, extending Wednesday’s sharp rally in the stock. But in his Greed & Fear newsletter, Christopher Wood of CLSA Asia-Pacific Markets warns that the continued meltdown of U.S. housing finance will mean bad things for the government-sponsored mortgage investor.

“The US private-sector mortgage machine is imploding,” he writes. “The question has now become whether the mortgage agencies will be able to take up the slack. The problem is that the mortgage agencies are themselves the victims of the spreading financial problems in the mortgage market.” He adds that Freddie and Fannie Mae (FNM) remain highly leveraged, exposing them to the risk of tumbling house prices.

Meanwhile, the market’s sharp rally Tuesday and Wednesday leaves some skeptics shaking their heads. “It doesn’t take a rocket scientist or the Amazing Kreskin,” writes Roger Ehrenberg at Information Arbitrage, “to see that things suck out there.”

Freddie Mac (FRE) is following in Citi’s footsteps to the fundraising trough. The government-sponsored mortgage investor slashed its quarterly dividend in half and set plans to raise $6 billion in new capital through two preferred stock issues. The decisions were announced late Tuesday, just a day after Citi (C) announced its $7.5 billion preferred stock sale to a fund run by the government of Abu Dhabi. CEO Dick Syron said the moves, which come a week after Freddie posted a $2 billion third-quarter loss that slashed its regulatory capital surplus by two-thirds, will “provide sufficient capital to continue fulfilling our important housing mission through the current market environment.”

Fortune’s Peter Eavis had predicted that Freddie and its sibling, Fannie Mae (FNM), would need to raise more capital to offset rising losses tied to soaring mortgage defaults. Freddie said it will sell the preferred stock “in the near term,” so it’s not clear what kind of yield — determined by its dividend – Freddie will have to offer. But given the 11% Citi paid to land its Middle East windfall, it seems reasonable to expect Freddie to have to pay a steep price. As Fortune’s Carol Loomis pointed out last week, investors are likely to demand compensation for Freddie’s inability to sell  them so-called cumulative preferred stock — the kind in which investors can later be made whole on any missed dividends.

Countrywide (CFC) doesn’t like Mondays. Shares of the struggling mortgage lender posted their third consecutive week-opening decline today, dropping 10% to $8.64 in heavy trading after The Wall Street Journal documented Countrywide’s increasing dependence on cheap Federal Home Loan Bank funding. Fortune’s Peter Eavis earlier noted a breathtaking - and, for taxpayers, deeply concerning - rise in lending by the FHLB to the government-sponsored mortgage investors, Fannie Mae (FNM) and Freddie Mac (FRE).

After Monday’s Journal story appeared, Senator Charles Schumer urged regulators to look into the sharp rise in FHLB lending to Countrywide. Schumer seems particularly concerned about the soundness of the collateral Countrywide has pledged to secure the loans, or advances, from the regional home lenders. The Journal reported that Countrywide has pledged $62 billion in collateral to secure $51 billion in advances — meaning Countrywide is getting about 82 cents on the dollar for the collateral it has surrendered to the FHLB.

We don’t know much what the FHLB took as collateral, beyond the dollar figure. But given that many nongovernment debt markets essentially have frozen up again in recent days, making just about any loan unsaleable at any price, it doesn’t sound like Countrywide is getting a bad deal. Whether the same can be said for John Q. Public remains to be seen.

The news keeps getting worse at Freddie Mac (FRE). The big government-sponsored mortgage investor saw its shares plunge 29% in a day last week after the company posted a $2 billion third-quarter loss and said it was considering halving its dividend in a bid to shore up its capital base. Then, on Friday, The Wall Street Journal reported that Freddie could face a big writedown of mortgage-related securities. The paper reports Freddie holds $105 billion worth of mortgage bonds issued by Wall Street firms. Freddie’s finance chief tells the Journal there’s no need for a writedown, given that the securities are almost all triple-A rated. That sounds depressingly similar to what Citi (C) and Merrill Lynch (MER) were saying just before they took multibillion-dollar writedowns on their subprime securities and collateralized debt obligation holdings last month. Wondering where all this could end up? Felix Salmon sketches out what might happen if further losses end up making Freddie Mac insolvent.