WASHINGTON - The lobbying group FM Watch said Freddie Mac's deal to buy a large part of a mortgage technology firm, Tuttle Decision Systems, from Microsoft Corp. signals a need for stronger regulation of government-sponsored enterprises
"Freddie Mac's acquisition of a major player in the electronic mortgage marketplace raises serious questions about who is overseeing the mission of" the GSEs, said Mike House, executive director of FM Watch - a coalition of banking and housing-related associations, financial institutions, and others critical of Fannie Mae and Freddie.
"For Freddie Mac to engage in the merger and acquisition business without giving its regulator prior review is a strong indication of the urgent need for a single and effective regulator," Mr. House said Friday.
Freddie announced Thursday that it had agreed to buy the Tuttle unit responsible for a suite of online lending tools and planned to use the technology to help brokers and small lenders originate loans over the Internet and sell them into the secondary market.
At the time of the announcement, a Freddie official said he expected a response from FM Watch.
"FM Watch has once again demonstrated that it doesn't understand our business," a Freddie spokesman said. "Our business simply is the secondary market and making it better for lenders and their consumer-customers."