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Saturday, January 26, 2008

GSEs's regulator opposes stimulus plan's mortgage fix

January 26 2007
Government agency takes stand against letting Freddie Mac and Fannie Mae buy higher-cost loans. The government agency, the Office of Federal Housing Enterprise Oversight (OFHEO), which has regulatory power over Freddie Mac and Fannie Mae opposes lifting the loan caps for the two agencies, part of the economic stimulus package announced Thursday. The stimulus package includes a proposal that temporarily raises loan limits for the government sponsored enterprises (GSEs), Fannie Mae and Freddie Mac. That could kick start sluggish residential real estate markets in high cost areas that have suffered through the liquidity squeeze that started last summer. "We are very disappointed in the proposal to increase the conforming loan limit as we believe it is a mistake to do so in the absence of comprehensive GSE regulatory reform." said James Lockhart, director of OFHEO, in a statement last Thursday.

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