OFHEO Chief Cautions Against Raising GSE Caps

Law360, New York (November 2, 2007, 12:00 AM EDT) -- The government should avoid raising the portfolio limits of lenders Fannie Mae and Freddie Mac, or risk setting a dangerous precedent for allowing government-sponsored entities to skirt regulation, according to the chief of the Office of Federal Housing Enterprise Oversight.

OFHEO Director James Lockhart said in a letter to Pennsylvania Representative Paul Kanjorski that allowing the companies to expand their portfolios was “unnecessary” and that such a move would “set an unfortunate precedent of overriding a safety and soundness regulator's judgment.”

“The current portfolio limitations are...
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