Still more errors have been found in Fannie Mae’s government-ordered review of its accounting, and the mortgage giant doesn’t expect the review to be finished before the second half of the year, Fannie Mae said today.
The government-sponsored enterprise said it had found accounting errors in addition to those it disclosed on March 13, and also, it will miss a regulatory deadline Wednesday for filing its financial report for the first quarter.
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 regulator for Fannie Mae and Freddie Mac and direct it to cut the approximately $1.4 trillion investment portfolios held by the government-sponsored enterprises.
In March, Fannie Mae notified the Securities and Exchange Commission that it would miss the March 16 deadline to file its 2005 annual report.
The mortgage giant today said in its filing with the SEC, “We have substantially completed a comprehensive review of our accounting policies and practices in order to determine whether these policies and practices are consistent” with standard accounting principles.
“Restating our financial statements is requiring a substantial amount of time and resources because the restatement entails significant complexities,” the company said.
Washington, D.C.-based Fannie Mae said the newly disclosed accounting errors involve transactions in its business of buying home mortgages from banks and other lenders and bundling them into securities, and the guaranty fees it charges the banks and other lenders. The company said it could not yet determine the effect of the errors on its financial situation.