Fannie Mae is circulating an "open patent license" agreement that would allow lenders to use its patented process for customizing mortgage loans without paying fees or royalties."It addresses a lot of the concerns that lenders had about the potential impact of this patent," said one industry source who did not want to identified. However, there are some concerns that sublicensing or limitations on working with vendors could pose operations problems for lenders. Another source declined to comment until a patent attorney has completed a review of the license agreement. Fannie received patent approval on Aug. 8, and it immediately raised concerns about a government-sponsored enterprise holding a patent that involves primary-market lending activities. Industry groups called on Fannie to place the patent in the public domain so lenders can use the Fannie process or design their own processes without facing the risk of litigation or penalties for patent infringement. Fannie's regulator, the Office of Federal Housing Enterprise Oversight, is also looking into the patent issue. But OFHEO declined to comment on the license agreement that Fannie is circulating.

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