(Read more on the debt and equity markets andthe multifamilymarket .)

WASHINGTON, DC-Multifamily investors and developers weredisappointed late Friday afternoon when James Lockhart, thedirector of the Office of Federal Housing Enterprise Oversight,announced he had decided not to increase the portfolio caps forFannie Mae and Freddie Mac. That has not stopped industryrepresentatives from urging the regulatory body to rethink itsdecision. In a joint letter released at close of business onMonday, the Mortgage Bankers Association, the National Associationof Home Builders and the National Association of Realtors explainedto OFHEO why temporarily increasing the caps on the investmentportfolios of Fannie Mae and Freddie Mac may well help to defusethe growing debt crisis.

"The nation's mortgage markets are facing a liquidity crisis ofa force and magnitude not seen in decades," it read. "The chillwill have far reaching effects throughout the housing market ifstability is not restored. A temporary increase in the allowablesize of the GSEs' loan portfolios for the purpose of easing thiscredit crunch would help stem the crisis."