SAN DIEGO - Faced with increasingly organized opposition in the mortgage industry and a move in Congress to tighten regulation of its business, Fannie Mae played political hardball at a convention here.

In a speech Monday at the Mortgage Bankers Association's National Secondary Marketing Conference, Fannie Mae vice chairman Jamie Gorelick said mortgage bankers should tell their trade group to oppose legislation sponsored by Rep. Richard Baker, R-La.

The measure would consolidate safety-and-soundness supervision of the government-sponsored housing enterprises under one regulator and eliminate a line of credit that Fannie and Freddie have with the Treasury.

The bill "is anti-housing" and "against the interests of the thousands of lenders who would like to have a choice on how to fund their mortgages," Ms. Gorelick said.

Her direct appeal to its members ruffled feathers at the trade group. Indeed, sources said top MBA officials "read her the riot act" afterward. But a tough speech raising the specter of higher homeownership costs - an issue that resonates with members of Congress - may have been a calculated risk for the government-sponsored enterprise.

"I think the MBA is part of their grass roots," and Fannie Mae is "using it that way," said Bruce Morrison, chairman of the Federal Housing Finance Board and a former congressman from Connecticut. Fannie has used the cost-of-homeownership issue to shoot down proposals to assess registration fees on its securities and to eliminate the mortgage interest deduction, Mr. Morrison noted.

"I don't think it will be persuasive" this time, he said. "Where it's been successful in the past, it's been largely accurate."

Mr. Morrison said it is lawmakers' failure to grasp complex financial structures that sometimes makes them vulnerable to their constituents' emotional appeals. But in this case, he said, regulators will counter by pointing out the ways regulatory reform would benefit homeowners.

Ms. Gorelick had some conference attendees buzzing when she seemed to question whether Fannie's role should be subject to discussion at all.

"The debate has raised our borrowing costs substantially, it has affected our service to you, and it has affected the prices you get for your mortgage-backed securities," she said.

Armando Falcon, director of the Office of Federal Housing Enterprise Oversight, which regulates Fannie and Freddie Mac, shot back: "The growth of the enterprises and their expanding activities … need to be discussed and debated. It's only healthy."

The MBA said it has not made its opinion on the bill public yet because Rep. Baker has not yet asked it to do so. A source familiar with the MBA's stance said the group thinks Fannie Mae was out of line in using the MBA conference as a platform.

Ms. Gorelick unloaded some heavy ammunition on FM Watch, a lobbying group formed last year by mortgage insurers and big financial services companies that fear encroachments on their turf by Fannie and Freddie, whose government charters give them cost advantages.

The group has called the Baker bill "a good first step" but says more has to be done to ensure that Fannie and Freddie help expand homeownership without creating risk for taxpayers.

FM Watch is "trying to force us from the field altogether," Ms. Gorelick said, adding that the group has opposed funding from Fannie to lenders to offer better service in the subprime market. She said if Fannie and Freddie met the higher affordable-housing goals advocated by FM Watch, some securities' liquidity would be damaged.

Ms. Gorelick portrayed FM Watch as controlled by entities that threaten the existence of small mortgage banks dependent on Fannie and Freddie to buy their loans.

"Now there are those who would break up this partnership," she said, "and leave the vast majority of mortgage bankers to fend for themselves in competition with a few large commercial banks that have the resources to have access to capital, to capital markets, that have insured deposits with access to the Federal Home Loan Banks' financing."

The Baker bill, Ms. Gorelick said, "is against the interests of the thousands of lenders who would like to have a choice on how to fund their mortgages."

Mr. Morrison, of the Housing Board, said it is true that many small mortgage banks depend on the government-sponsored enterprises, but said it was disingenuous to portray Fannie as allied with small companies, because the GSEs' biggest partners are big insured depositories. The only nonbank in the top 25 is Countrywide Credit Industries of Calabasas, Calif., Mr. Morrison said.

"At some level," he added, "this is a bizarre discussion."

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