Rep. Rick Lazio, R-N.Y., and Rep. Richard Baker, R-La., introduced a bill Thursday that could slow the growth of Fannie Mae's and Freddie Mac's share in the upper end of the mortgage market.

The bill would require the secondary market agencies to fully reflect drops in national housing values before they increase their loan ceilings.

Under current law, they need not lower their loan ceilings when housing values drop. Nor do they have to wait until prices fully rebound before increasing their maximums.

This year, Fannie Mae and Freddie Mac increased their loan ceilings by about 2%, to $207,000, to reflect the increase in home values from 1994 to 1995.

But average housing prices fell 4.4% in 1993 and 1994 from 1992 levels, and only 60% of that drop was regained in 1995.

The two legislators, who oversee Fannie and Freddie as chairmen of two key House Banking subcommittees, strenuously opposed this year's increase.

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