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Fannie Mae execs give up $31.4M in settlement

Regulators had originally sought seven times as much

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Three former Fannie Mae executives have agreed to pay $31.4 million in penalties and restitution to settle charges that they manipulated earnings from 1998 to 2004. The settlement, with former Fannie Mae Chairman and Chief Executive Officer Franklin Raines, former Chief Financial Officer J. Timothy Howard, and former controller Leanne G. Spencer, represents about one-seventh of the $215 million in civil penalties and restitution regulators said they would seek in filing charges with an administrative law judge in December 2006 (see Inman News story). At the time, the Office of Federal Housing Enterprise Oversight said that Raines should repay $84.6 million in bonuses, performance pay and stock options he collected between 1998 and 2003. The government also sought the return of $27.3 million Howard received in options and bonuses during the same period, and $5.6 million from Spencer. Raines received a $19 million severance package when he took early retirement from Fannie M...