After all, the American mortgage market is one of the most regulated parts of finance anywhere: dominated by two governmentsponsoredagencies, Fannie Mae and Freddie Mac, and guided by congressional schemes to increase home-ownership.
The bank had agreed to repurchase bum loans it sold to the government-sponsored agencies, which are now demanding more for the loan repurchases than Bank of America had projected.
Democratic Senator Charles Schumer of New York says it would help if the government-sponsored agencies were allowed to hold more mortgages on their books, something the Bush administration has been reluctant to permit.