Fannie Reports More Accounting Errors

Fannie Mae has found a few more errors in its accounting practices as it continues to make "significant progress" in restating its earnings for 2004, according to a filing with the Securities and Exchange Commission.The SEC filing lists 15 previously disclosed accounting errors and three new errors that Fannie said it is trying to resolve as it works toward filing a 2004 annual financial statement in the second half of this year. The government-sponsored enterprise has already identified $10.8 billion in losses due to the misapplication of accounting rules related to hedge accounting and mortgage commitments. "We do not expect to be able to quantify the financial impact" of the other errors "until we complete our restatement," Fannie says in the 12b-25 filing. Fannie Mae has kept its regulator -- the Office of Federal Housing Enterprise Oversight -- apprised of the accounting errors, and the GSE said it believes it continues to meet its capital requirements. Restatement expenses, including related costs of regulatory examinations, investigations, and litigation, totaled $569 million in 2005. The SEC filing also discloses that Fannie's administrative expenses totaled $2.2 billion in 2005, up from $1.5 billion in 2004. Fannie Mae can be found on the Web at http://www.fanniemae.com.