This road looks familiar...

Disruptions in the secondary market for mortgage loans constitute "a liquidity crisis of a force and magnitude not seen in decades." Says who? No, it's not PIMCO manager Bill Gross this time.

The quote is from a letter by real estate industry groups, including NAR, NAHB, and the Mortgage Bankers Association, begging federal regulators to lift the caps on Fannie Mae and Freddie Mac's loan portfolios.

President Bush and the Office of Federal Housing Enterprise Oversight have already said no to the idea. Bush wants Congress to pass a GSE reform bill first, and OFHEO says Fannie and Freddie still have internal problems and wouldn't be able to help the markets that need it most -- subprime and Alt-A -- anyway. 

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