By James Tyson
Aug. 10 (Bloomberg) -- The regulator for Fannie Mae and Freddie Mac rejected requests by the government-chartered companies to allow them to buy more home loans and help ease a credit crunch that has frozen the U.S. mortgage market.
``We are not authorizing any significant changes at this time,'' the Office of Federal Housing Enterprise Oversight said today in an e-mailed statement. The agency ``will continue to reassess that position.''
Ofheo resisted pressure from Fannie Mae and Freddie Mac, the largest sources of money for U.S. home loans, and Democratic lawmakers who said the companies should step in to fill a gap left by buyers who fled the market. Ofheo's decision parallels the view of President George W. Bush, who said yesterday the companies must complete a ``robust reform package'' before they can buy home loans beyond current federal limits.
Washington-based Fannie Mae requested an increase in its asset ceiling that Chief Executive Officer Daniel Mudd said today amounted to 10 percent of the company's home loan portfolio, or about $72 billion.
Mudd's call for an increased asset ceiling was ``surprisingly out front, especially in light of the president's comment,'' said Karen Shaw Petrou, managing partner at Federal Financial Analytics Inc. in Washington. ``Most companies are loath to confront the president.''
Petrou's clients include FM Policy Focus, a lobbying group advocating stricter oversight for Fannie Mae and Freddie Mac.
Fannie Mae spokesman Brian Faith declined to comment on Ofheo's decision.
``We continue to believe that raising the cap would enable us to bring some much needed liquidity to the market,'' said Sharon McHale, a spokeswoman for McLean, Virginia-based Freddie Mac.
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