Last week Treasury Secretary John Snow and Housing and Urban Development (HUD) Secretary Mel Martinez testified before the House Financial Services Committee about the proposal to increase the safety and soundness of Freddie Mac and Fannie Mae. They also reiterated the Bush Administration's support for both GSEs' housing mission.

Though the content of the testimony was mostly expected by the market - specifically the push to place Fannie and Freddie oversight to a new agency to be formed under the Department of the Treasury - shares of both GSEs along with other financials were weak on the news, said analysts.

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