OFHEO-Fannie, Freddie must avoid some subprime loans

WASHINGTON, July 13 (Reuters) - The regulator for mortgage finance companies Fannie Mae (FNM.N: Quote, Profile, Research, Stock Buzz) and Freddie Mac FRE.M told the companies not to buy mortgages that do not conform to consumer protection standards set by bank supervisors, the regulator said Friday.

The Office of Federal Housing Enterprise Oversight (OFHEO) told the companies to avoid loans that do not meet standards set by bank regulators in two recent notices aimed at curbing dangerous subprime loans to borrowers with damaged credit.