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Schumer: Let Fannie, Freddie buy extra $145 billion in mortgages

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Saying Fannie Mae and Freddie Mac should be allowed to play a greater role in helping troubled subprime borrowers, Sen. Charles Schumer Monday announced legislation that would authorize the government-sponsored entities to buy an additional $145 billion in mortgages. Schumer, D-N.Y., said Fannie and Freddie would be required to use half the authorization to refinance adjustable-rate mortgages with interest rates scheduled to reset between June 2005 and December 2009. The authorization -- which would be accomplished by temporarily raising the $1.4 trillion cap on the GSEs' loan portfolios by 10 percent -- would help only borrowers who are able to meet Fannie and Freddie's underwriting standards. Schumer's bill, the Protecting Access to Safe Mortgages Act, is aimed at helping the 40 percent of subprime borrowers who could have qualified for prime loans, but who ended up with riskier loans because they were taken advantage of by mortgage brokers, he said. "We're not bailing anybody out...