Mortgage giant Freddie Mac announced on Monday that it is on track to report full-year financial results by the end of March 2005 and will return to quarterly reporting for the second quarter of next year.
The company has not been current in its financial reporting since a 2003 accounting scandal resulted in a $5 billion earnings restatement, a $125 million civil penalty and the removal of five executives.
The company said in a statement that significant systems revisions are still required because of new accounting rules and its adoption of revised accounting policies from the 2002 restatement.
“While we have made substantial progress, we face continuing challenges because of the prior deficiencies in our accounting infrastructure and the operational complexities caused by the enormous volume of revised and new accounting policies that we have adopted,” the company said in a statement.
But returning Freddie Mac to timely financial reporting remains one of the company’s top goals, said Eugene M. McQuade, president and COO.
The company did announce preliminary and unaudited year-to-date volume statistics for 2004, through the end of the third quarter. The total mortgage portfolio grew to $1.489 trillion by Sept. 30, up from $1.414 trillion at the end of December 2003. The increase represents an annualized growth rate of 7.1 percent.
New business purchase volume was $383.8 billion year-to-date in 2004, down from $668.5 billion for the first nine months of 2003. Total mortgage portfolio liquidations were $308.7 billion year-to-date in 2004, down from $631.1 billion for the first nine months of 2003.
Freddie is a shareholder-owned company chartered by Congress to ensure a constant flow of mortgage funds.
The company’s accounting scandal last year prompted an investigation into its corporate cousin, Fannie Mae, which led to a scathing 211-page report revealing evidence of improper accounting at the Fannie. That report has brought about harsh criticism and intense federal scrutiny, including a formal investigation by the Securities and Exchange Commission.
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