Fannie Mae’s board of directors has apparently decided that the company’s chief financial officer will step down, according to the Wall Street Journal.

The newspaper reported today that a person familiar with the situation said the board met on Sunday and “appeared” to have decided that Timothy Howard will leave the embattled mortgage giant. Terms of his expected departure have not been settled, the Journal reported.

The Journal said no decision was made on the fate of CEO Franklin Raines.

Fannie Mae did not issue a statement about the board meeting and a company representative was not immediately available for comment.

The board met to discuss whether to make changes to top management after the U.S. Securities and Exchange Commission said the company had failed to comply with accounting rules.

Fannie Mae said last month that such a correction would mean the company might have to record $9 billion in previously unreported losses.

Fannie Mae’s regulator, the Office of Federal Housing Enterprise Oversight, earlier this year released a scathing 211-page report alleging the company used improper accounting techniques.

The shareholder-owned company, chartered by Congress to keep a steady flow of mortgage funds for the nation’s housing market, asked the SEC to review its accounting after the OFHEO report was released.

In October, Raines told a congressional hearing he believed Fannie Mae followed generally accepted accounting principles and that its independent auditor, KPMG, reviewed the application of the company’s accounting standards and concurred with them.

Fannie Mae’s stock (NYSE:FNM) was trading at $69.80 this morning, down from its open of $70.31.


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