Fannie Mae finds more errors
WASHINGTON -- As it continues to peel through the onion-like layers of its $11 billion faulty accounting, mortgage company
The government-sponsored company, which finances one of every five home loans in the United States, said it had made substantial progress toward completing its accounting review but will miss a regulatory deadline for filing its annual financial report for the second straight year.
Top company executives sought to assure investors that all focus and energy was not being engulfed by the massive reworking of Fannie Mae's books and that new avenues of business were being pursued in an increasingly competitive US mortgage market. Some high-level executives have been ''walled off" from the work of the accounting review, they said.
''There's huge demand out there," president and chief executive Daniel Mudd said in a conference call with analysts.
As the record housing market of recent years shows signs of cooling, Mudd said the company expects home sales to decline about 8 percent this year from last.
Fannie Mae also said it expects an upcoming internal report to show the company's financial controls remained insufficient as recently as the end of last year.
Federal regulators in 2004 accused Fannie Mae of serious accounting problems and earnings manipulation to meet Wall Street targets, and the Securities and Exchange Commission ordered the company to restate earnings back to 2001 -- a correction expected to reach an estimated $11 billion.
