Senator Charles Schumer (D-NY), said in a statement released yesterday that he will seek to introduce legislation to temporarily lift the current GSE portfolio limitations when Congress reconvenes in September if OFHEO director James Lockhart will not do so. From the press statement:

“We cannot afford a ‘wait and see’ approach when it comes to a credit crisis that threatens to derail our economy,â€? said Schumer. “The Bush administration continues to ignore one tell-tale sign after another that the subprime woes are threatening the broader mortgage markets. Fannie and Freddie are uniquely positioned to inject badly needed liquidity into the economy, but the President won’t let them do their job. These companies need their caps lifted now. If the Bush administration won’t act, we will.” … If the regulators do not take action to allow Fannie Mae and Freddie Mac to perform their critical role as market stabilizer, Senator Schumer plans to introduce legislation in September to temporarily raise the portfolio caps that are serving as impediments to the GSE’s ability to preserve liquidity in the market. This emergency measure is not only important to restore confidence in the mortgage market for current and aspiring home buyers, but it would also allow Fannie and Freddie to engage in subprime foreclosure relief efforts across the country before the “October surpriseâ€? of subprime resets further shocks the mortgage markets.

Looks like Schumer didn’t like Lockhart’s little letter from last week very much, and isn’t taking it lying down.