Fannie Mae declared a second quarter dividend on its common stock Tuesday, holding to the $0.26 per share that it declared for the first quarter back in December 2004.

This number is only notable because the first quarter dividend was exactly half what stockholders had come to expect in previous quarters. The slash in payments came about after the mortgage giant had been ordered by its regulators to increase capitalization by $9 to $12.5 billion, depending on which expert one listens to.

At that time the value of Fannie Mae stock (FNM) fell from around $70 per share - a price that was already reflecting the corporation´┐Żs woes - to under $68. The closing price on April 20 was $53.27.

Richard Syron, CEO of Freddie Mac and Daniel Mudd, Acting CEO of Fannie Mae were scheduled to testify before the Senate Banking Committee on Wednesday. There has been much pressure from members of Congress, Federal Reserve Chairman Alan Greenspan, U.S. Treasury Secretary John W. Snow, and others to drastically limit the total value of mortgages that the two corporations are allowed to carry in their own portfolios.

In prepared testimony released to the press prior to the hearings both CEOs disagreed with their critics. The two cautioned against such "arbitrary" limitations, warning that they could impact the availability of long-term, fixed-rate mortgages. Mudd also cautioned that such a move might have adverse effects on interest rates and influence the placement of foreign investment dollars in the U.S. housing market.

Mudd, however, did agree that legislation attempting to reform the two corporations should include the creation of a strong regulator with power to approve or disapprove corporation initiatives and have control over Freddie and Fannie in the event of further financial problems.