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Schumer wants to lift mortgage debt
caps
BY TAMI LUHBY, NewsDay.com
Sen. Charles Schumer (D-N.Y.) said Thursday that he
would introduce a bill to temporarily lift the investment
limit on Fannie Mae's and Freddie Mac's mortgage debt
portfolio to help inject more liquidity into the mortgage
market.
Regulators limited Fannie Mae and Freddie Mac to holding
a total of $1.4 trillion in mortgage debt after the companies
were wracked by accounting scandals. Created by Congress
to spur homeownership, Fannie Mae and Freddie Mac buy
mortgages and package them into securities to sell to
investors. They are the largest buyers of home loans.
The agencies are now close to hitting those limits,
but regulators last week denied Fannie Mae's request
to raise the cap by 10 percent, or about $72 billion.
The mortgage industry has been in turmoil in recent months
as a growing number of homeowners default on their loans
and investors turned their back on buying mortgage-backed
securities.
Schumer said that if the regulators don't relax the
rules, he will bring up the issue in Congress when it
reconvenes in early September.
"We cannot afford a 'wait and see' approach when
it comes to a credit crisis that threatens to derail
our economy," Schumer said.
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