James Lockhart, director of the Office of Federal Housing Enterprise Oversight, says he is "satisfied" with a congressional proposal to regulate Fannie Mae's and Freddie Mac's giant portfolios, even though Treasury Department officials have not endorsed it.The proposal worked out between Treasury officials and Rep. Barney Frank, D-Mass., in December would allow a new supervisor of the housing government-sponsored enterprises to regulate the size and growth of the portfolios. "I am satisfied with the language," Mr. Lockhart said, adding that it accomplishes "what needs to be done in relation to the portfolios." Mr. Lockhart also told reporters that OFHEO is studying a proposal in a House GSE bill that raises the $417,000 conforming loan limit so Fannie and Freddie can purchase mortgages in high-cost housing markets. Critics contend that the House proposal is too broad and would cover whole states, not just high-cost areas. So OFHEO researchers are testing various criteria for raising the loan limit. One test showed that only 10 to 11 metropolitan statistical areas would be affected, primarily in California and the suburbs around New York.

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