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WASHINGTON, DC-Mortgage lender Fannie Mae has brought on new hires at the top, while revealing newly discovered accounting errors and confirming previously estimated earnings restatements for the three-year period ending in 2003. The information was documented in the government-sponsored company’s Nov. 10 filling with the Securities and Exchange Commission.

The lender is still unable to report third quarter 2005 and third quarter 2004 results of operations due to its re-auditing process. Fannie Mae also reported that reviews of its accounting practices and policies have uncovered previously unnoted errors in its derivative accounting, reclassification of securities, amortization of premiums and discounts, guaranty accounting and Low Income Housing Tax Credit investments and synthetic fuel investments accounting. The news reaffirms Fannie Mae’s estimate that earnings restatements will total $10.8 billion.

In its ongoing effort to restructure operations from the top down due to its accounting troubles, Fannie Mae’s board of directors has chosen former MCI EVP and CFO Robert T. Blakely to serve as the mortgage lender’s new CFO. The board also elected Mike Williams, who had been serving as the executive vice president for regulatory agreements and restatement, to the position of COO.

“Last June, I said our priorities were to recapitalize our company to achieve a 30% capital requirement established by our regulator, OFHEO, get to the bottom of our accounting issues as we work through the restatement and re-audit, and round out Fannie Mae’s senior management team,” says Fannie Mae president and CEO Daniel Mudd. “As we continue to make changes and progress, including the achievement of our 30% capital requirement, we fully recognize that we have much more to do.”

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