Fannie: New Errors on $28B in Assets

Fannie Mae, which is working through a $10.8 billion earnings restatement scandal, has found yet more accounting errors and will have to repatriate $28.5 billion in assets to its balance sheet.A company spokeswoman told MortgageWire that the government-sponsored enterprise cannot, at this time, determine whether moving the off-balance-sheet assets (Fannie mortgage-backed securities) to its on-balance-sheet portfolio will result in an additional loss or gain. The GSE is in the process of restating its earnings for 2001 through 2004 and has yet to release any profits for 2005 and the first quarter of this year. Fannie says it expects to release the revised 2001 through 2004 earnings after June 30 of this year. The restatement is expected to result in a cumulative loss of $10.8 billion. The information about the $28.5 billion was contained in a new "12b-25" filing with the Securities and Exchange Commission. The filing also reveals that Fannie has dumped $126 billion of its own MBS on the market over the past year. From March 31, 2005 to March 31, 2006, its holdings of its own MBS have fallen by a stunning 27%. The filing also notes that the GSE is still in danger of being delisted by the New York Stock Exchange, though few in the industry believe it will actually happen. Fannie Mae can be found online at http://www.fanniemae.com.