Regulator settles with ex-Fannie Mae execs

The restrictions were recently relaxed to enable the federally chartered companies to provide more support to the distressed U.S. housing and mortgage markets.

Fannie Mae and Freddie Mac buy mortgages from lenders, freeing up more funds to create home loans. The companies repackage the mortgages as securities to sell to investors or to hold in their own portfolios.

In 2006, Fannie Mae paid a $400 million civil fine in a settlement with OFHEO and the Securities and Exchange Commission.

(Editing by Jonathan Oatis)