OFHEO Launches Fannie Accounting Review

As part of its special review of Fannie Mae's accounting policies and practices, the Office of Federal Housing Enterprise Oversight on Friday sent the secondary market giant an extensive, three-page document request letter.The letter contains 18 specific requests, including copies "of all communications" (including e-mail) from January 1999 through October 2003 regarding "deficiencies, shortcomings, weaknesses or failings in accounting practices or financial reporting at Fannie Mae or the failure to comply with accounting policies of Fannie Mae." OFHEO also wants documents from Fannie's auditor, KPMG. An OFHEO spokeswoman said the request letter is just the beginning of the special examination. The exam process is expected to be so extensive and time-consuming that the agency is conducting a search for an outside forensic auditor to handle the task. A Fannie Mae spokesman said the company is in the process "of getting it all put together for them." Fannie Mae can be found online at http://www.fanniemae.com.