Fannie, Heal Thyself

Fannie Mae wants to help financially troubled mortgage holders keep their home. But the company has its own fiscal problems; namely, filing financi...
Stephen TaubAugust 10, 2007

Accounting woes continue to plague Fannie Mae. The world’s largest mortgage company said in a regulatory filing that it will not report its June 30 quarterly results on time because it has not completed its financial statements for the period.

In the filing, the company noted that it is still in the process of completing its audited consolidated financial statements for the 2006 calendar year. Fannie also pointed out that it has not yet completed its financials for the quarter ended March 31, 2007. Officials did say, however, that the company will file its 2006 annual report on August 16.

The announcement of the delay, which was issued on Thursday, seems to have come at an awkward time for Fannie, which operates in the now-troubled secondary-mortgage market. On the same day as the announcement, Fannie chief executive Daniel Mudd called on regulators to raise the cap on the company’s mortgage portfolio to allow it to buy more home loans. “We are ready to start investing now,” Mudd told CNBC.

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In fact, Mudd took the offensive, asserting that Fannie could help some homeowners who are currently facing the possibility of losing their home due to defaults. “Right now, we would like to be able to buy those mortgages,” he said in the interview.

In fact, several lawmakers have asked the Office of Federal Housing Enterprise Oversight, which regulates Fannie Mae and sister company Freddie Mac, to consider easing a restriction on the companies’ mortgage investments, reports Reuters. However, the wire service noted that on Thursday, President Bush spoke out against lifting the investment limits. “First things first when it comes to those institutions,” Bush reportedly said. “Congress needs to get them reformed; get them streamlined. Get them focused and then I will consider other options.”