"Let me say right here at the outset: Fannie Mae understands that we have disappointed a lot of people," Fannie Mae vice chairman and interim CEO Daniel H. Mudd testified, referring to the company's internal accounting mishaps. "We want to be…a company whose business is totally centered on the affordable housing mission Congress created us to serve." He said Fannie Mae welcomes the creation of a new regulator that has "powers on par with those of bank regulators." For additional information on the Fannie Mae situation, go to Oversight Director Reveals Fannie Mae Practices in Testimony.

Fannie Mae's and Freddie Mac's support for a new regulator was matched only by their denouncement of suggested portfolio limits. Earlier this month, Federal Reserve Board Chairman Alan Greenspan recommended a $200 billion limit on the GSE's individual mortgage portfolios.

"For Freddie Mac to continue fulfilling its mission, there is a very real limit to how far the restrictions on us can be increased--and our abilities diminished--before the providers of our debt and equity capital decide to take their money elsewhere," Freddie Mac chairman and CEO Richard F. Syron said. "Shrinking our portfolio, even over several years, will only accomplish two things. First, it will increase the concentration of such mortgages held by four or five explicitly insured depository institutions who are even bigger than we are. Second, arbitrarily limiting our retained portfolio would decrease over time the availability of the long-term, fixed-rate, prepayable mortgage. The decline of this product would do clear harm to the US economy."