Pressured Fannie Board Meets, Takes No Action

Fannie Mae's board met in special session on Sunday as the mortgage giant's regulator continued to pressure the company to fire chairman and chief executive Franklin Raines and chief financial officer Timothy Howard.However, as of around noon Monday the board had not taken any action against either executive. One government source added that the Office of Federal Housing Enterprise Oversight "has the authority to take whatever action" it considers necessary. A mortgage executive close to the company said the board is facing "enormous pressure" to fire both men, adding that the board "wants to maintain continuity." On Monday morning, Fannie Mae had no comment. Last week the Securities and Exchange Commission threw out Fannie's accounting interpretations on FAS 133 (accounting for derivatives/hedging), a move that will force the congressionally chartered company to book $9 billion in losses over the past three years, and fall below its minimum capital requirement.