Fannie, Freddie rise after dive a day earlier

Fannie Mae shares rose $1.88, or 11.9 percent, to $17.62 Tuesday, a day after shares plunged 16.2 percent. Freddie Mac shares rose $1.55, or 13 percent, to $13.46 after sliding 17.9 percent on Monday.

At issue with Fannie Mae and Freddie Mac--the nation's largest purchasers of mortgages--is how a new potential accounting rule could affect their capital requirements.

The Financial Accounting Standards Board is reviewing a rule that might force financial firms to take mortgage-backed securities that are currently off their balance sheets and place them on balance sheets.

Securitizations--the sale of bonds backed by pools of loans--are one of Fannie Mae and Freddie Mac's primary sources of generating new revenue.

James Lockhart, the director of the Office of Federal Housing Enterprise Oversight, said during an interview Tuesday with CNBC, "an accounting change should not drive a capital change."

OFHEO, which acts as Fannie and Freddie's regulator, declined to comment further than Lockhart's remarks made to CNBC.

OFHEO is working with the accounting board, Lockhart said.

If Fannie and Freddie were to have to add portions of their securitizations business back on to their balance sheets, Fannie Mae would need to raise $46 billion in cash to meet capital requirements, while Freddie Mac would need to raise $29 billion, Lehman Brothers analyst Bruce Harting wrote in a research note Monday.

Analysts widely agreed any accounting rule change likely would not affect Fannie Mae and Freddie Mac.