A GSE bill that cleared the Senate Banking Committee last July on an 11-9 vote would impose "onerous restrictions" on Fannie Mae's and Freddie Mac's portfolios, according to all nine Democrats on the committee.In filing their objections to the government-sponsored enterprise bill (S. 190), the Democrats stress that "strong, effective regulation" will provide for safe and sound operations regarding the GSE portfolios. The minority members said they support the Office of Federal Housing Enterprise Oversight's recent action to impose a cap on Fannie's portfolio. However, the portfolio limitations in S. 190 would reduce liquidity in the mortgage market and "cause damage to affordable housing markets" by restricting purchases and investments in mortgage revenue bonds and low-income housing tax credits, the minority report says. The Democrats also stress that strengthening Fannie's and Freddie's affordable housing goals and creating an AH fund are "a prerequisite to a successful effort on GSE reform." The Democrats filed their views in mid-June for inclusion in a committee report on S. 190. But the Senate Banking Committee has not released the report yet. A committee spokesman indicated that the report would be issued once the Senate is ready to debate and vote on S. 190.

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