Industry News

Fannie Mae won’t file second-quarter earnings

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Mortgage finance giant Fannie Mae said Tuesday that it will not file a second-quarter earnings report while it continues to clean up its financial books in the wake of an accounting scandal that came to light last year. The company hasn't filed a quarterly earnings report in one year. Regulators in 2004 uncovered accounting violations at Fannie Mae, setting off investigations by the Securities and Exchange Commission and the U.S. Justice Department and several shareholder lawsuits. As a result, the company will have to restate earnings by as much as $12 billion. Fannie Mae CEO Daniel Mudd said the restatement likely won't be complete until the second half of 2006. "We are leaving no stone unturned. To accomplish this, we have to obtain and validate market values for a large volume of transactions including all of our derivatives, commitments and securities at multiple points in time over the restatement period," Mudd said. Fannie Mae expects that more than 30 percent of its empl...