The checks are in the mail — $356 million in checks to investors who were allegedly harmed by financial fraud at Fannie Mae between 1998 and 2004.

The checks are being mailed to individual investors, pension plans and others by the Securities and Exchange Commission, which reached a settlement last year with the government-sponsored mortgage repurchaser.

The Commission announced a toll-free number, 1-800-760-6903, and Web site, SECFannieMaeSettlement.com, have been created for investors who think they may be entitled to part of the settlement.

The SEC charged Fannie Mae with issuing materially false and misleading financial statements in filings to the commission and in reports to investors.

When the settlement was announced in May 2006, the Office of Federal Housing Enterprise Oversight estimated that improper accounting practices encouraged by senior managers led Fannie Mae to overstate earnings by an estimated $10.6 billion.

The allegations led to the departure of top executives and a $728 billion cap on Fannie Mae’s lending portfolio.

Fannie Mae in December issued results of an internal audit, saying it overstated earnings for 2001 through the first half of 2004 by $6.3 billion. OFHEO last month gave Fannie leeway to grow its mortgage portfolio by 2 percent a year. Some lawmakers want Fannie Mae and Freddie Mac to have even greater leeway to purchase more mortgages.

Freddie Mac, which also endured an accounting and management scandal, reached a $50 million settlement with the SEC last month. The commission said Freddie Mac attempted to smooth earnings volatility by understating net income by $1.1 billion in 2000 and $4.3 billion 2002, and then overstating it by $989 million in 2001.

According to the Wall Street Journal, the SEC is currently investigating a dozen companies in the wake of more recent turmoil in mortgage lending. Rising delinquencies and defaults have put many lenders out of business or in the red, and made it harder for those who remain to borrow money or sell their loans in the secondary market.

Citing anonymous sources, the Journal said stock sales by Countrywide Financial Corp.’s chief executive officer, Angelo Mozilo, are an area being investigated by the SEC. Mozilo sold $130.6 million in Countrywide stock in the first half of the year, before the company’s share prices lost more than half their value.

The Journal reported New Century Financial Corp. is also the subject of an SEC investigation into accounting and stock sales by senior executives.

Show Comments Hide Comments
Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Success!
Thank you for subscribing to Morning Headlines.
Back to top
Only 3 days left to register for Inman Connect Las Vegas before prices go up! Don't miss the premier event for real estate pros.Register Now ×
Limited Time Offer: Get 1 year of Inman Select for $199SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription
×