Fannie, Freddie Say Cuts Would Reduce Funding

The chief executives of Fannie Mae and Freddie Mac told a congressional panel that the U.S. housing market would attract less foreign investment if Congress forced the mortgage finance companies to reduce their $1.5-trillion loan portfolios.

Foreign investors have bought one-third of the benchmark securities issued by Washington-based Fannie Mae over the last six years, Fannie Mae interim Chief Executive Daniel Mudd said in testimony before the Senate Banking Committee. The two largest sources of money for U.S. home loans raise money by selling bonds to U.S. and foreign investors.