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by CareyBot

Democrats haven't embraced a proposal to give Fannie Mae and Freddie Mac additional leeway to refinance $125 billion in subprime mortgages, with one legislator going so far as to post a letter on his Web site from a Bush administration official that shoots the idea down. Rep. Paul Kanjorski, D-Pa., wrote James Lockhart, the head of the federal regulator that oversees the safety and soundness of Fannie and Freddie, on Oct. 24, asking for his views on a proposal to temporarily increase Fannie and Freddie's debt limits. In his Oct. 31 response to Kanjorski, Lockhart called legislation that would allow a temporary increase in Fannie and Freddie's combined $1.46 trillion loan portfolios "unnecessary, unsafe and unsound." The legislation "could have the unfortunate effect of appearing to set a ...