Fannie Mae said it expects to take a $240 million writedown on $8.3 billion in securities that were recently criticized by its regulator, the Office of Federal Housing Enterprise Oversight.The mortgage giant also said in its first-quarter 10-Q filing with the Securities and Exchange Commission that the writedown will be taken in the second quarter and will not require a restatement of earnings. "We believe that no restatement of prior-period financial statements is required," Fannie said. OFHEO recently directed Fannie to recognize losses on its investments in manufactured housing securities and aircraft lease securities as they occur, which raised the possibility of a restatement. But based on meetings with SEC officials, Fannie officials maintain that their accounting policies are consistent with generally accepted accounting principles and that a restatement is not necessary. But an OFHEO spokeswoman said the restatement issue remains open. "That is still to be determined," she said. OFHEO is in the midst of a special examination of Fannie's accounting practices and policies. On May 7, an analyst report put out by Smith Barney estimated that Fannie might have to take an impairment charge of $1.2 billion to $2.4 billion on the portfolio.
