Regulator to Block New Loan Products from Fannie, Freddie

The Wall Street Journal reports:

Mortgage-finance giants Fannie Mae and Freddie Mac will not be allowed to introduce new loan products in the mortgage market while they are under the control of the U.S. government, the companies' federal regulator announced Tuesday in a letter to Congress.

Since last summer, Fannie and Freddie had been allowed to submit new loan products for review through a process established by the companies' federal regulator, the Federal Housing Finance Agency. While no new products have been submitted yet, the regulator cited the companies' massive losses and looming challenges in making his decision to block future product submissions.