Freddie Mac wishes that Congress had passed a GSE regulatory reform bill last year, according to the company's newly issued 2004 annual report."It is unfortunate that a bill didn't pass last year, and we are working hard to achieve one this year," Freddie Mac president and chief executive Richard Syron says in a message to shareholders. The annual report points out that Congress is considering proposals this year that would give the new regulator of housing government-sponsored enterprises the authority to regulate the size of Freddie's mortgage portfolio and "require substantial reductions in those investments." Freddie Mac generates a significant portion of its profits from its $652.9 billion portfolio, and the legislation could have a "materially adverse effect" on Freddie Mac's future earnings, according to management's discussion in the annual report. Last year, the Bush administration was not pressuring Congress to limit the GSEs' portfolios.

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