Business Digest: FHFA reducing Fannie, Freddie portfolios

MORTGAGE FINANCING

FHFA reducing Fannie, Freddie portfolios

The federal regulator in charge of Fannie Mae and Freddie Mac said Tuesday that the mortgage finance giants would not be taking on additional measures to bring down interest rates on home loans as other government programs to stimulate the housing market expire.

The Federal Housing Finance Agency said it is committed to reducing the companies' mortgage portfolios and does not expect the firms "to be substantial buyers or sellers of mortgages." The agency said it expects private investors will step in as other government initiatives, such as the Federal Reserve's trillion-dollar mortgage-acquisition program, wind down.

-- Zachary A. Goldfarb

BANKING

PNC to pay back government bailout funds

PNC Financial Services Group said Tuesday it will pay back $7.6 billion in bailout funds to the U.S. Treasury, a sign of confidence in the financial system.

The Pittsburgh-based financial services company received approval to redeem the preferred shares held by the government under the Troubled Asset Relief Program, or TARP.

To fund the repayment, PNC plans to offer $3 billion of its common stock and senior notes totaling $1.5 billion to $2 billion.