A day after the Obama administration punted on deciding the future of Fannie Mae and Freddie Mac, the regulator of the government-sponsored enterprises told top lawmakers that conservatorship "cannot be a long-term solution."

But Edward DeMarco, the acting director of the Federal Housing Finance Agency, said there was not much he could do.

"There are a variety of options available for post-conservatorship outcomes, but the only one that the FHFA may implement today under existing law is to reconstitute the two companies under their current charters," DeMarco wrote in a letter to the top Democrats and Republicans on the Senate Banking and House Financial Services committees.

The eight-page letter, dated Tuesday, also addressed the Treasury Department's controversial decision in December to lift the caps on credit lines available to Fannie and Freddie.

DeMarco wrote that the decision recognized the "importance of maintaining market confidence" in Fannie and Freddie but acknowledged that "these calls on taxpayer funds are troubling to all of us."

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