Fannie Mae has replaced the chairman of its board’s audit committee, a central part of the mortgage giant’s struggle to deal with the $11 billion accounting scandal that continues to haunt the company.

Accounting professor Dennis Beresford will replace audit committee chairman Thomas Gerrity, the company said Friday, just days before federal regulators are scheduled to release a major report on their extensive examination of the government-sponsored company. Gerrity will step down as a director and will leave the board by the end of 2006, Fannie Mae said.

The Office of Federal Housing Enterprise Oversight, which has a federal mandate to oversee Fannie Mae, is scheduled to release its report on Fannie Mae Tuesday. The report is widely expected to be sharply critical of Washington-based Fannie Mae, and the role of its board of directors in the accounting debacle is expected to be examined.

OFEO in September 2004 accused Fannie Mae of serious accounting problems. The Securities and Exchange Commission subsequently ordered the company to restate earnings back to 2001 — a correction expected to reach an estimated $11 billion.

Fannie said May 9 that still more errors had been found in its own government-ordered review of its accounting, and the mortgage giant doesn’t expect the review to be finished before the second half of the year.

In December 2004, Fannie Mae replaced Franklin Raines, its chairman and CEO, who announced he was taking early retirement, and Fannie Mae’s chief financial officer, Timothy Howard, resigned Dec. 21.

In early February of this year, the Bush administration said Congress should create a new regulator for Fannie Mae and Freddie Mac and direct it to cut the approximately $1.4 trillion investment portfolios held by the government-sponsored enterprises.

In March, Fannie Mae notified the Securities and Exchange Commission that it would miss the March 16 deadline to file its 2005 annual report.

Show Comments Hide Comments
Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Success!
Thank you for subscribing to Morning Headlines.
Back to top
Only 3 days left to register for Inman Connect Las Vegas before prices go up! Don't miss the premier event for real estate pros.Register Now ×
Limited Time Offer: Get 1 year of Inman Select for $199SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription
×