Fannie Whistleblower to Testify

A Fannie Mae whistleblower who helped regulators unravel how the mortgage giant allegedly managed earnings will testify before a congressional panel on Oct. 6.Roger Barnes, who left the company 11 months ago, is scheduled to testify before the House Financial Services subcommittee on government-sponsored enterprises, chaired by Rep. Richard Baker, R-La. The subcommittee is lining up other witnesses, but Mr. Barnes, who worked in the controller's office at Fannie Mae, is the only one confirmed so far. In its 200-page report on Fannie's accounting scandal, the regulator focuses a great deal on the company's recognition of amortization income and expenses. The Office of Federal Housing Enterprise Oversight notes that the accounting assumptions used by Fannie Mae "for amortizing purchase premiums and discounts on securities and loans as well as amortizing other deferred charges" violated generally accepted accounting principles. Mr. Barnes, according to the OFHEO report, raised the issue of accounting irregularities at the company, but Fannie's office of auditing failed to address his concerns. Fannie Mae can be found online at http//www.fanniemae.com.