The portfolio cap for the McLean, Va.-based company does not stand alone, however. A similar cap was placed on Fannie Mae earlier this year, following the OFHEO's special examination of Freddie Mac's larger rival stemming from a bunch of accounting irregularities. The errors in both the GSEs' earnings reports have also forced top executives out of these companies and they are now in the process of reworking bookkeeping and corporate governance issues. In response to Freddie Mac's voluntary acceptance of the cap, the OFHEO Director James Lockhart issued a statement concurring with the decision. "Freddie Mac has a need to address the size and scope of its portfolio, particularly in light of current operational problems surrounding accounting and internal controls," Lockhart said. "A large retained portfolio presents both inherent risks as well as a distraction from the tasks at hand for the enterprise - implementing its various remedial plans."