Industry News

Fannie Mae told to restate earnings

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The Securities and Exchange Commission's chief accountant has advised embattled mortgage giant Fannie Mae to correct its past accounting and restate its financial statements. Fannie Mae said last month that such a correction would mean the company might have to record $9 billion in previously unreported losses. "Fannie Mae's accounting practices did not comply in material respects" with two accounting rules, said Donald Nicolaisen, the SEC's chief accountant, in a written statement. "Fannie Mae internally developed its own unique methodology." Fannie Mae's regulator, the Office of Federal Housing Enterprise Oversight, earlier this year released a scathing 211-page report alleging the company used improper accounting techniques. The shareholder-owned company, chartered by Congress to keep a steady flow of mortgage funds for the nation's housing market, asked the SEC to review its accounting. In a written statement, Fannie Mae SVP Chuck Greener said the company "will take the steps nece...