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Fannie asks regulators to raise cap on lending portfolio

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Fannie Mae has asked federal regulators to raise a cap on its mortgage loan portfolio that was put in place in the wake of management and accounting scandals -- a move President Bush says he won't consider until Congress passes legislation overhauling oversight of Fannie and Freddie Mac. "We believe that a moderate increase in the range of 10 percent is appropriate given both current market conditions and the importance of prudent market practice," Chief Executive Daniel Mudd said in a statement issued Friday. "We believe this action, in conjunction with actions taken by the Federal Reserve Board and others, would help to alleviate the ongoing credit crunch in the markets and bring an additional measure of stability." Sen. Christopher Dodd, D-Conn., chairman of the Senate Banking Committee, made a similar request Tuesday, asking the Office of Federal Housing Enterprise Oversight (OFHEO) to consider lifting caps on the loan portfolios of both Fannie and Freddie Mac. Fanni...