Source: Zachary Goldfarb, Washington Post ( Free Registration )

Reading the latest report from the federal regulator running mortgage finance giants Fannie Mae and Freddie Mac could give you whiplash.

Fannie Mae and Freddie Mac had said at the end of June that they had billions of dollars more of a financial cushion than required by their regulator. The report by the Federal Housing Finance Agency yesterday reaffirmed that, saying Fannie Mae had $9.4 billion and Freddie Mac had $2.7 billion more capital than required.

But, even though the companies were adequately capitalized, the regulator yesterday declared them undercapitalized. How did it square that circle? 

Read Full Article: Mixed signals for mortgage giants