The Bush administration is starting special reviews of the financial operations of mortgage giants Fannie Mae and Freddie Mac.

The administration has long been critical of the two companies, and officials have pointed to the accounting scandals to bolster their case that the massive mortgage portfolios are improperly managed and pose a risk to the financial system.

“The time is right for Treasury to review its debt approval process to ensure that we continue to act as appropriate custodians of the power that Congress gave us when the charters of Fannie Mae and Freddie Mac were created,” Quarles said in a text of his speech to the Women in Housing and Finance group. “I have asked the Treasury staff to undertake such a review to ensure that the process by which we exercise this responsibility is appropriate in light of all the circumstances.”

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