Industry News

Fannie Mae investigation report: No news is good news

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Fannie Mae has already disclosed the accounting problems that caused its nearly $11 billion accounting scandal, none of its current management knowingly participated in improper behavior, and necessary improvements have been made or are underway, a long-awaited report on the mortgage giant revealed today. The 2,652-page report from former New Hampshire Republican Sen. Warren Rudman concluded that Timothy Howard, Fannie's former chief financial officer, and Leanne Spencer, the company's former controller, were responsible for the accounting practices that departed from generally accepted accounting principles (GAAP). As for the mortgage giant's former chief executive officer, Franklin Raines, the report said, "We did not find that he knew that the company's accounting practices departed from GAAP in significant ways." The report said it did find that Raines contributed to a culture that improperly stressed stable earnings growth, and that hence he was "ultimately responsible for the f...