Fannie under fire from Ofheo
Last month, US mortgage agency Fannie Mae came under fire from its regulator – the Office of Federal Housing Enterprise Oversight (Ofheo) – for accounting and operational failures, about a year after sibling mortgage agency Freddie Mac became embroiled in its own accounting scandal. Despite the damaging news, the market has yet to feel the burn.
On October 6, in a statement before the subcommittee on capital markets, insurance and government-sponsored enterprises, Armando Falcon, director of Ofheo, said the September Ofheo report documented Fannie’s “pervasive and [willing] misapplication of Generally Accepted Accounting Principles as well as critical operational deficiencies”. In particular, under question are the validity of Fannie Mae’s previously reported financial results, the adequacy of its regulatory capital, the quality of
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