Industry News

Regulator: Former Fannie Mae execs to be named in suit

DOJ closes investigations of Fannie and Freddie, but OFHEO is not done

Two top former Fannie Mae executives will likely be named in a lawsuit being prepared by the company's federal regulator, the Office of Federal Housing Enterprise Oversight, over an accounting and management scandal.  OFHEO director James Lockhart said Fannie Mae's former CEO Frank Raines and former Chief Financial Officer Timothy Howard are likely to be named in the pending lawsuit. Lockhart made the remarks at an American Enterprise Institute roundtable discussion about the future of the government-sponsored mortgage repurchaser, Reuters reported. From 1998 to 2004, OFHEO has estimated Fannie Mae overstated reported income and capital by $10.6 billion. The company agreed to pay $400 million in fines as part of settlements with OFHEO and the Securities and Exchange Commission. But the company appeared to be on the way to putting the scandal behind it. Last month Fannie Mae announced that the Justice Department had wrapped up its investigation and would not file charges against...