Fannie Mae

WASHINGTON - Three years after a stunning accounting scandal that forced Fannie Mae to restate earnings by $6.3 billion, the government-backed home loan finance company now is on the defensive over a change in how it calculates potential losses from the growing mortgage crisis. The fear among investors is that a new accounting methodology masks the number of bad loans held by Fannie, thus downplaying potential losses. Shares of Fannie, the largest US buyer and backer of home mortgages, tanked for the second day yesterday, even as executives tried to pacify skeptical Wall Street analysts in...

WASHINGTON - US mortgage giant Fannie Mae reported its first net income gain since it was taken over by the government during the 2008 financial crisis. Fannie said Wednesday that it earned net income attributable to common stockholders of $2.7 billion in the January-March quarter. Instead of seeking additional aid from taxpayers, the company will pay a dividend of $2.8 billion to the Treasury Department. That compares with the same quarter one year ago when Fannie reported a net loss of $6.5 billion.

WASHINGTON -- The former Fannie Mae accountant who raised questions about the mortgage giant's bookkeeping said yesterday he took his concerns to chief executive Franklin Raines in 2002 and asked him to investigate. The disclosure by Roger Barnes, who left Fannie Mae in October 2003, came as Raines and chief financial officer Timothy Howard defended the firm's accounting and told Congress that regulators' allegations of earnings manipulation represent an interpretation of complex rules.

Donald Layton, the former chief executive of brokerage firm E(asterisk)Trade Financial Corp, will be the next CEO of Freddie Mac. The government-controlled mortgage company says Layton will take over the top job on May 21. He will succeed Charles E. Haldeman Jr., who announced last fall that he would resign as CEO this year. Layton, 62, spent 30 years working at JPMorgan Chase and its predecessor companies. He also was a senior adviser to the Securities Industry and Financial Markets Association, Wall Street's biggest lobbying group.

WASHINGTON - Mortgage finance company Fannie Mae said yesterday it has adopted a policy allowing renters to remain in their homes even if their landlord enters foreclosure. The policy will allow renters living in foreclosed properties to sign leases with Fannie while the property is up for sale. Sibling mortgage financier Freddie Mac , based in McLean, Va., is working on a similar policy, spokesman Brad German said. But Amy Marx, an attorney with New Haven Legal Assistance in Connecticut, said Freddie Mac has not been responsive to requests it do the same, and has continued...

WASHINGTON -- As it continues to peel through the onion-like layers of its $11 billion faulty accounting, mortgage company Fannie Mae disclosed yesterday that it has found additional errors in its government-ordered review. The government-sponsored company, which finances one of every five home loans in the United States, said it had made substantial progress toward completing its accounting review but will miss a regulatory deadline for filing its annual financial report for the second straight year.

WASHINGTON -- Federal Reserve chairman Alan Greenspan yesterday urged Congress to restrict the multibillion-dollar holdings of the mortgage companies Fannie Mae and Freddie Mac , warning their huge debt could imperil US financial markets. His admonition lent support to an effort to tighten controls on the government-sponsored companies, following accounting scandals. The Fed chairman told a Senate committee it might not be enough just to create a strong regulator for the companies, which hold or guarantee more than 45 percent of all US mortgage loans.

WASHINGTON -- Under pressure from federal regulators, mortgage giant Fannie Mae has agreed to boost its reserve cushion against risk by several billion dollars and take other sweeping actions to correct what were cited as serious accounting problems, including recalculating key transactions and tightening internal controls. Some observers said yesterday that the mandate to increase its reserve capital by mid-2005 means that the biggest financer of home mortgages in the country may have to slow its growth or shrink in size.

WASHINGTON -- The chief executive and top financial officer at mortgage giant Fannie Mae were forced out of the company yesterday as the nation's second largest financial institution struggled to deal with disclosures of serious financial reporting problems. Chief executive Franklin Raines said in a statement issued last night that he had decided to resign because of his pledge to hold himself accountable if regulators determined the existence of accounting errors. "By my early retirement, I have held myself accountable," Raines said.

NEW YORK — The Securities and Exchange Commission may pursue civil charges against Fannie Mae’s former chief executive, Daniel Mudd, over the mortgage giant’s disclosure of exposure to risky loans. He got a so-called Wells notice from the SEC, which alerts the target of an investigation that charges may be coming. “I intend to submit a written response that will make clear why the SEC staff should not pursue any action,’’ Mudd said in a statement. Mudd was named chief executive in 2004 after the SEC found Fannie Mae had violated accounting rules.

Government-controlled mortgage giant Freddie Mac is requesting $19 million in additional federal aid after posting a loss for the first quarter of this year. The requested amount is less than the $146 million that Freddie received from the government for the fourth quarter of 2011. The company received $7.6 billion for all of 2011 and $13 billion for all of 2010. McLean, Va.-based Freddie Mac said Thursday that its net loss attributable to common stockholders was $1.2 billion, or 38 cents a share, in the January-March period.

WASHINGTON - Treasury officials are leaning toward recommending that Fannie Mae and Freddie Mac be replaced with a government safety net for the mortgage finance system and continued federal backing for loans to lower-income homebuyers, said three people briefed on the discussions. Treasury Secretary Timothy Geithner has said that a recommendation for winding down the two taxpayer-owned mortgage companies could be released in coming weeks. In timing its proposal, Treasury must balance political and economic realities.

WASHINGTON - The Treasury Department rushed out a major revamp of its foreclosure prevention program in 2010, limiting the plan's ability to help people who are unemployed or owe more than their homes are worth, a government watchdog says. Treasury's Hardest Hit Fund, which distributes money to state housing agencies for a range of programs, has been plagued by delays and disagreements with mortgage companies that must participate for the program to succeed, according to a report released Thursday by the special inspector...

Massachusetts Attorney General Martha Coakley is looking to step up pressure on Freddie Mac and Fannie Mae to reduce loan principal for homeowners struggling to pay their mortgages and avoid foreclosure. In a letter sent Wednesday to Edward DeMarco, acting director of the Federal Housing Finance Agency, a coalition of state attorneys general that includes Coakley advocated for swift implementation of principal forgiveness in federal loan modification programs. The agency oversees Fannie and Freddie.

Massachusetts Attorney General Martha Coakley is looking to step up pressure on mortgage giants Freddie Mac and Fannie Mae to reduce loan principal for homeowners struggling to pay their mortgages and avoid foreclosure. In a letter sent Wednesday to Edward DeMarco, acting director of the Federal Housing Finance Agency, a coalition of state attorneys general that includes Coakley advocated for swift implementation of principal forgiveness in federal loan modification programs. The Federal Housing Finance Agency oversees Fannie and Freddie.

WASHINGTON - The director of the government's housing finance agency said Tuesday that it might now make more sense for Fannie Mae and Freddie Mac to reduce the amount of money homeowners owe on loans held by the agencies. Because of new incentives put in place by the Obama administration, the agencies might cut their losses by easing up on the borrowers, he said. Edward J. DeMarco, who as acting head of the Federal Housing Finance Agency has long opposed this type of relief for people whose homes are worth less than their mortgage debts, said that a new...

WASHINGTON -- Federal regulators have found evidence suggesting that mortgage giant Fannie Mae manipulated earnings to facilitate bigger bonuses to executives, according to a lawmaker familiar with the findings. In an eight-month investigation, the agency that supervises Fannie Mae found a pattern of manipulation aimed at smoothing out volatility in profits from quarter to quarter similar to that which occurred at rival Freddie Mac -- whose understatement of billions in profits prompted a management shake-up and a $125 million government fine.

NEW YORK - Bank of America Corp. has told Fannie Mae it won't cooperate with the mortgage company's new stance on loan buybacks. The bank is disputing Fannie Mae's demand that lenders repurchase mortgages or cover any losses if an insurer drops coverage, Bank of America said this month in a regulatory filing. The lender, ranked second by assets among US banks, said it "does not intend to repurchase loans" under what it deems to be new rules, and the refusal may trigger penalties or other sanctions, according to Fannie Mae. At stake is Bank of America's...

Ed DeMarco popped into Boston last week and stood firm against the wishes of his biggest shareholder. Most people don't know DeMarco's name. They do, however, know the companies DeMarco runs. This is because they own DeMarco's companies. DeMarco is the federal overseer in charge of Fannie Mae and Freddie Mac, the federally owned mortgage giants that have swallowed $152 billion in taxpayer funds. He's locked in a bitter dispute with the White House, the Treasury, and the Federal Reserve, because he is keeping Fannie and Freddie from aggressively writing down the value of...

Bank of America said Thursday that it would offer a small number of customers facing foreclosure the option to remain in their homes and rent the property instead. The program highlights how investors are increasingly interested in becoming landlords on troubled properties. Under the terms of the pilot program, which will be offered initially to about 1,000 consumers only in New York, Nevada, and Arizona, homeowners will give up the title to their property in exchange for bank forgiveness of their mortgage debt.