Fannie Hires OFHEO Contractor as Auditor

Fannie Mae has hired Deloitte & Touche LLP as its independent auditor, a firm that has been working for its regulator conducting a special forensic investigation of the troubled government-sponsored enterprise.A spokeswoman for the Office of Federal Housing Enterprise Oversight told MortgageWire that the agency will "move to immediately end its relationship" with D&T. However, OFHEO will continue its investigation into Fannie Mae's accounting practices. The agency approved Fannie's hiring of D&T. Two weeks ago the GSE fired its long-time auditor, KPMG LLP, in the wake of a ruling by the Securities and Exchange Commission that it would have to restate prior-years' earnings by $9 billion. The restatement is tied to Fannie's misinterpretation of FAS 133 on accounting for derivatives and hedging activities.