Reuters: Regulatory News: Banks to get clarity on home loan repurchases-U.S. regulator

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Banks to get clarity on home loan repurchases-U.S. regulator Sep 10th 2012, 21:19 WASHINGTON, Sept 10 | Mon Sep 10, 2012 5:19pm EDT WASHINGTON, Sept 10 (Reuters) - The regulator for Fannie Mae and Freddie Mac said on Monday it would give mortgage lenders more clarity on which type of loans they would be required to buy back if the loan goes sour. Government-controlled Fannie Mae and Freddie Mac, which buy mortgages from lenders and repackage them as securities for investors, will review the quality of the loan 30-120 days after the loan purchase, the Federal Housing Finance Agency said. "This is an important step in improving upon past business practices," the regulator's acting director, Edward DeMarco, said in remarks to be delivered at a housing conference. The government's mortgage financiers and banks have been fighting over who should shoulder losses from bad home loans made during the housing bubble. The new standards would apply to loans sold on or after Jan. 1.

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