Christopher Cox, in one of his last acts as the Securities and Exchange Commission's chairman, took Fannie Mae and Freddie Mac's regulator to task in a letter questioning whether the agency was upholding its duty to "preserve and conserve" the government-sponsored enterprises' assets.

In the Jan. 16 letter to Federal Housing Finance Agency Director James Lockhart, Cox asked whether Fannie and Freddie were being pressed too hard to bolster the housing markets at the expense of profits. As a member of an oversight board advising Lockhart, Cox urged him to develop an "exit strategy" from conservatorship that would restore the GSEs' finances.

The letter, which has not been made public, underscores the tension at Fannie and Freddie between their duties to investors and government demands that they help end the worst housing crisis since the Great Depression.

The issues facing the GSEs, saddled with seven consecutive quarters of losses totaling $150 billion, will be examined by a House panel today.

"The statutory and publicly stated goal for the conservatorship is to restore these institutions to financial health," Cox wrote four days before Democrats took control of the White House.

Public demands on the GSEs may prevent their emergence from government control, the letter said. Cox warned of "significantly" adding to taxpayer liabilities.

Lockhart would not discuss the five-page letter directly, but he said in an e-mail last week that the role of Fannie and Freddie in reducing foreclosures would help stem the GSEs' losses in the long run. "As Fannie Mae and Freddie Mac hold or guarantee $5.4 trillion of mortgages, stabilizing the mortgage market is extremely important to their financial future," Lockhart said.

Neither Cox, who left the SEC on Jan. 20, nor John Nester, a spokesman for the SEC, would discuss the matter.

The Government Accountability Office said in a May 6 report that under Cox, the SEC instituted policies that slowed cases and led enforcement-unit lawyers to conclude that commissioners opposed fining companies.

Cox served on the four-member Federal Housing Finance Oversight Board, which Congress created in July to advise the FHFA. The board now includes Lockhart, SEC Chairman Mary Schapiro, Treasury Secretary Timothy Geithner and Housing and Urban Development Secretary Shaun Donovan.

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