Thank you for sharing!

Your article was successfully shared with the contacts you provided.

WASHINGTON, DC-Fannie Mae has agreed to follow the Office of Federal Housing Enterprise Oversight’s instructions for making changes to its internal operations. The housing mortgage lender, a government-sponsored enterprise, will, among other new practices, increase its capital reserves to 30% of its holdings; a significant jump from its current practice of maintaining a cushion of 18%.

The new guidelines come after a Sept. 20 report from OFHEO which concluded that, following an eight-month investigation, Fannie Mae had manipulated earnings and engaged in dubious accounting practices. Freddie Mac, the other GSE mortgage lender, was also discovered to have incorporated deceptive accounting practices, resulting in a multi-billion restatement of earnings last year. The new OFHEO guidelines are designed to assure appropriate and honest operations within the corporation.

“We are in full support of today’s agreement, says Fannie Mae chairman and CEO Franklin D. Raines. “Working with the board [of Directors] and the company’s regulators, we will begin to take steps immediately to comply with and implement the terms of the agreement.” Under the agreement, Fannie Mae will also conduct regular reviews of internal accounting controls and will share those reviews with OFHEO.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 3 free articles* across the ALM subscription network every 30 days
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.