FM Watch, an industry group formed to check the alleged "charter creep" of Fannie Mae and Freddie Mac, has accused the two of threatening and intimidating its board members for supporting the organization. The group also announced it is dissolving its eight-member advisory board.

"In each instance the message was the same: stop supporting the activities of FM Watch or be prepared to see your business opportunities and products suffer," said FM Watch chairman Gerald Friedman. Friedman said in order to "remove the focal point of Fannie Mae and Freddie Mac's threats," it would disband the board.

Some mortgage executives who operate top-ranked firms believe this could spell the beginning of the end for FM Watch. "It's over for them," said one mortgage manager, requesting his name not be used. FM Watch's accusations about the two government-sponsored enterprises, as well as the announcement on the board, was contained in a statement by Friedman.

The statement followed the publication of a Wall Street Journal article that cites examples of alleged threats, including one in which Fannie Mae said it would cut J.P. Morgan Chase & Co. from its debt seller group unless its president William Harrison resigned from FM Watch's board. (Mr. Harrison recently resigned from the board.)

Spokespersons from both Fannie and Freddie said they in no way made any type of threat to any board members in regard to FM Watch. "I think this just reflects the loss of momentum that FM Watch is experiencing," said a Freddie Mac spokesperson.

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