The House Financial Services Committee is preparing to mark up a GSE regulatory reform bill on May 25, sources have told MortgageWire.There seems to be broad agreement on most of the provisions in the government-sponsored enterprise bill, sponsored by Rep. Richard Baker, R-La., which would create a new independent regulator for Fannie Mae, Freddie Mac, and the Federal Home Loan Banks. However, the Bush administration maintains that the section giving the new regulator the authority to reduce the size of Fannie's and Freddie's mortgage portfolios is not tough enough. But it appears that the committee chairman, Rep. Michael Oxley, R-Ohio, does not want to change the language, sources said. Besides portfolio limits, the other main area of negotiation is affordable housing goals. Committee Democrats want to revamp the goals so that Fannie and Freddie have to purchase Community Reinvestment Act loans and use 5% of their profits to fund AH projects. Rep. Baker indicated several months ago that he would accept such an amendment in return for the Democrats' support for the GSE bill.

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