There is widespread agreement that the Office of Federal Housing Enterprise Oversight’s risk-based capital regulation for Fannie Mae and Freddie Mac is ineffective. Where the diversity of opinion kicks in is in how to improve it. Speaking at a recent mortgage industry event in Washington, DC, OFHEO Director James Lockhart said the risk-based capital rules for Fannie and Freddie need to be substantially revised. “The rules, which are prescribed in the original law, amount to…