Congress Eyes Cuts In Fannie AndFreddie

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WASHINGTON - (03/14/06) – Fannie Mae and Freddie Macshares declined Monday after Fannie Mae disclosed it had discoveredeven more accounting errors and still had no plans to issue GAAPfinancial reports. The disclosure comes as Congress renews debateover legislation to set new limits on the two secondary mortgagemarket giants. The House Financial Services Committee is scheduledto hear testimony Tuesday about a year-long report by former Sen.Warren Rudman that described manipulations of Fannie Mae’sbooks to please Wall Street and qualify top executives for bonuses.The Financial Services Committee and the Senate Banking Committeehave already passed separate versions of a bill to tightenoversight of the two mortgage giants. But the two committees arefar apart on issues. The Senate bill, for example, would requiretwo companies to sell off parts of their huge mortgage portfolios.Fannie Mae shares closed down Monday 2% to $52.90, and Freddie Macclosed down 1% to $63.

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