The National Association of Home Builders and the National Association of Realtors are stepping forward in defense of Fannie Mae and Freddie Mac, the two government-sponsored enterprises that are attacked now for the accounting scandals they underwent recently. The two powerful industry bodies are projected to voice their opposition to the government’s plan to cut the portfolios of the two entities. The plan involves reducing the holdings of the two companies from the combined $1.5 trillion they currently have to some hundreds of billions. Bush proposes to leave the option to establish the maximum size of the holdings to the new oversight body that will supervise the two companies that are now overseen by Ofheo. This proposal was outlined by Treasury Secretary John Snow last week.

The plan evoked severe criticism from the supporters of Fannie and Freddie who are warning that the two agencies are crucial for providing the housing to low-to-middle income families.

’’I’ve been doing this [business] for 51 years," said Angelo R. Mozilo, chief executive of Countrywide Financial Corp.. "I don’t know how familiar [Mr. Snow] is with the housing market."

Some Congressmen are pushing for a reform that would stipulate that the new regulator has the powers to impose limits on the two bodies’ portfolios. This is a compromise that could help to alleviate the controversy.