Industry News

Lawmakers criticize Fannie Mae in hearing

House panel airs allegations of accounting fraud

Lawmakers and a federal regulator criticized the ousted former chief executive of mortgage giant Fannie Mae Tuesday as a House panel aired government allegations of a six-year accounting fraud at the mortgage giant, media reports said today. The regulator who oversees Fannie Mae blamed Franklin Raines and other senior company officials for the massive accounting failures and alleged manipulations designed to enrich executives, reports said. And the chairman of the subcommittee holding the hearing, Rep. Richard Baker, R-La., contended that Raines probably lied to Congress when he testified about the debacle in October 2004, according to the Washington Post. The Office of Federal Housing Enterprise Oversight, which has a federal mandate to oversee Fannie Mae, released a sharply critical report of Washington, D.C.-based Fannie Mae in May. Fannie Mae agreed to pay $400 million in fines and implement corrective measures as part of settlements with OFHEO and the Securities and Exchange Com...

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