Sen. Bob Corker has asked the administration to justify removing the cap on Fannie Mae and Freddie Mac's government financing.

In a letter Monday, the Tennessee Republican asked Treasury Secretary Tim Geithner several questions about the deal, including whether the government has effectively nationalized the government-sponsored enterprises and how the administration is ensuring shareholders and debt holders will not unfairly benefit.

The move was part of the administration's Dec. 24 amendments to its preferred stock purchase agreements with the GSEs. Under the deal, the Treasury removed the $200 billion cap that had been imposed on each company's government borrowings when they were placed in federal conservatorship in September 2008.

"Those amendments … in effect, wrote a blank check for the amount of 'credit' that will be made available to the two mortgage giants," wrote Corker, a Senate Banking Committee member.

Corker expressed concern about other details of the purchase agreements, saying that the government's 79.9% preferred stock positions in the firms — rather than an 80% stake — allows the Treasury to avoid having to disclose the GSEs' liabilities on its balance sheet.

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