Industry groups push to raise caps on GSEs’ loan portfolios

Trade groups representing realtors, builders and mortgage lenders Monday urged federal regulators to temporarily increase caps on the loan portfolios of mortgage repurchasers Fannie Mae and Freddie Mac. "The nation's mortgage markets are facing a liquidity crisis of a force and magnitude not seen in decades," the groups said in a letter to James Lockhart, director of the Office of Federal Housing Enterprise Oversight, or OFHEO. "The chill will have far-reaching effects throughout the housing market if stability is not restored. A temporary increase in the allowable size of the GSEs' loan portfolios for the purpose of easing this credit crunch would help stem the crisis." Democratic lawmakers have made similar requests of OFHEO, and Fannie Mae Chief Executive Officer Daniel Mudd has asked for the cap on Fannie's portfolio to be raised by 10 percent. Limits on the loans the government-sponsored entities (GSEs) are allowed to hold in their portfolios were put in place following managemen...