Though controversial differences remain, congressional committees could start marking up legislation to create a new regulator for Fannie Mae and Freddie Mac within weeks and send a bill to the president by the end of the year, Senate staffers representing both sides of the aisle have told the Mortgage Bankers Association's National Secondary Market Conference."I think we're really close," Joe Cwiklinski, staff director of the Senate Banking subcommittee on securities and investment, told the San Francisco conference. Adam Healy, legislative assistant to Sen. Tim Johnson, D-S.D., agreed, saying "there appears to be a convergence on some of the issues." One issue on which some division remains is how to manage the size of the government-sponsored enterprises' portfolios. While some are calling for strict caps, a consensus seems to be building to allow the new regulator to determine the appropriate amount of the two companies' holdings, the staffers said. Perhaps more difficult is the question of what is and what is not a secondary market function. But the staffers think this issue can be worked out, too. "Our differences aren't that far apart," said Mr. Cwiklinski, who also is legislative assistant to the subcommittee chair, Sen. Chuck Hagel, R-Neb. "It's in everyone's best interest to have a bill this year."

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