Industry News

Report reinforces call for tighter GSE controls

Fannie Mae, Freddie Mac regulation pushed

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The Bush administration and a key House lawmaker on Tuesday cited a recently released investigation finding a breakdown in financial controls at Fannie Mae to bolster their push for tighter controls of the mortgage giant, media reports said. The probe by a team led by former Sen. Warren Rudman, R-N.H., detailed major accounting deficiencies and an arrogant corporate culture at Fannie Mae. Rudman's report said Fannie Mae's former chief financial officer and controller shared primary responsibility for the accounting failures at the company. Fannie Mae is now reworking its books. Both Fannie Mae and its fellow government-sponsored enterprise, Freddie Mac, have been rocked by accounting scandals. In December 2004, Fannie Mae replaced Franklin Raines, its chairman and CEO, who announced he was taking early retirement, and Fannie Mae's chief financial officer, Timothy Howard, resigned Dec. 21. In early February of this year, the Bush administration said Congress should create a new regula...