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Watt Reverses Efforts to Shrink Fannie Mae, Freddie Mac

The U.S. regulator overseeing Fannie Mae and Freddie Mac is assuming an increasingly pivotal role in the housing market as bipartisan efforts to wind down Fannie Mae and Freddie Mac are meeting resistance in the Senate.

Melvin L. Watt, director of the Federal Housing Finance Agency, said yesterday that he thinks Congress needs to act to determine the companies’ future. Until then, Watt, who’s been running the agency since January, is shifting course to ensure Fannie Mae and Freddie Mac bolster the weakening housing market and aid troubled borrowers.