Fannie Mae Announces New AccountingProblems

Register now

WASHINGTON - (11/11/05) -- Fannie Mae, still struggling tountangle an $11 billion accounting scandal, reported Thursday thatnew accounting errors have been uncovered, as it reached outsidethe company to hire a new finance chief. Fannie Mae reported thatnew accounting problems that have been uncovered in several areas,including recording losses on mortgages and the mortgage-backedsecurities it guarantees as well as expenses for financing somereal estate investments and accounting for low-income housing taxcredits and mortgage insurance. The company did not provide anestimate of the amounts of the errors. The announcement came a dayafter the company's sister secondary mortgage company Freddie Mac,also struggling with multi-billion dollar accounting problems,reported it will be forced to shave $220 million off of previouslyannounced first half earnings because of a computer error. FannieMae said it has hired as its new chief financial officer RobertBlakely, executive vice president and CFO of MCI , which emergedfrom bankruptcy following a multibillion-dollar accounting scandalat the former WorldCom Inc.

For reprint and licensing requests for this article, click here.
MORE FROM AMERICAN BANKER