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GSE reform bill wouldn’t set cap on Fannie, Freddie portfolios

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The government shouldn't impose arbitrary caps on Fannie Mae and Freddie Mac's lending portfolios, but should distance itself from some of the government-sponsored mortgage repurchasers' debt obligations should they get into financial trouble. That's the view of a bipartisan bill introduced Friday to overhaul regulatory oversight of Fannie and Freddie and prevent a repeat of the management and accounting scandals of 2004. The bill, HR 1427, is expected to generate about $500 million a year for an affordable-housing fund to address concerns that the government-sponsored entities have neglected the mission they were chartered by Congress to perform. Backers of the bill from both parties hope it will resolve the long-running GSE reform debate. Although there has been general agreement about the need to create an independent oversight agency with powers similar to those of a bank regulator to oversee Fannie and Freddie, Democrats have opposed a Bush administration proposal to set limits ...