The two biggest players in the mortgage market are at each other's throats - again.

Fannie Mae has fired off a letter to the government claiming that rival Freddie Mac is getting a regulatory free ride in low-income lending.

The letter, from Fannie chairman James A. Johnson to Housing Secretary Henry Cisneros, blasts the government for accepting Freddie's "poorer performance and weaker efforts" at supporting loans to people with low and moderate incomes.

For the past two years, the government has held Fannie Mae to higher affordable housing goals than Freddie Mac. For this year, the targets call for Fannie Mae to surpass Freddie Mac's purchases of low-income loans by $1.2 billion, Fannie says.

Mr. Johnson, according to a Dow Jones report, wrote that the unequal goals have allowed his rival to "deploy its capital to support 'plain vanilla' activities requiring far lower expenditures on research, development, risk management, and marketing with zero regulatory risk."

He urged Mr. Cisneros to scrap the existing targets and come up with a fairer plan.

The missive marks the second time in three months that the friction between the mortgage titans over affordable housing has exploded into public view.

In October, Freddie Mac's chairman, Leland Brendsel, shocked the mortgage industry by saying that Fannie was "blowing smoke" about its long- term plans in affordable housing. Mr. Johnson replied that he was "appalled" by the comment.

Fannie Mae, Freddie Mac, and HUD all declined to comment on Mr. Johnson's letter, which was dated Jan. 4.

Warren Lasko, executive vice president of the Mortgage Bankers Association of America, likened the increasingly public battle between the mortgage agencies to the heated competition between telecommunications giants AT&T and MCI.

Taking the gloves off "gets people's attention," Mr. Lasko said.

Mr. Johnson sent his letter in response to a decision by HUD to extend last year's affordable housing targets to this year.

The process of setting new targets for 1995 is far behind schedule, and may be drawn out even more if Republicans succeed in freezing all new regulations until June 30.

The existing goals, which were set by Congress in 1992, are higher for Fannie Mae because Freddie Mac suffered huge losses in the multifamily housing market and pulled out altogether.

Congress decided to give Freddie Mac two years - 1993 and 1994 - to get back up to speed in the multifamily market. Freddie Mac has since reentered the multifamily market.

An early version of the rules HUD is drafting suggests Fannie and Freddie will have equal goals in the future. But these rules are not likely to take effect for at least another year.

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