Fannie Mae - Accounting Review Update
March 13, 2006
Statement by Daniel H. Mudd, President and Chief Executive Officer, Fannie Mae
Today, Fannie Mae filed a Form 12b-25 with the U.S. Securities and Exchange Commission (SEC) that provides an update on our progress in completing our accounting review as we continue our financial restatement, as well as a report on our business. In our filing, we are reporting that we have made substantial progress in completing our accounting review. In particular, we have completed the process of identifying accounting issues for review.
Although our review of accounting policies and practices is not complete, we have made significant progress in completing our analysis and determination with respect to the accounting issues we have identified.
As I noted on February 23rd upon release of the Paul, Weiss investigation report, we expect in our continuing restatement effort that we could identify additional accounting matters and, as we resolve them, we will disclose them. In today's filing, we detail several errors we identified in the course of our accounting review that were not previously disclosed in our SEC filings or described in the Paul, Weiss report.
These issues include accounting for certain investment securities at the incorrect cost basis; accounting for certain guaranty fees and obligations in connection with a small portion of Fannie Mae mortgage backed securities trusts; and certain loan-related accounting matters, such as accounting for real estate-owned and foreclosed property expense, accounting for troubled debt restructurings, accounting for the accrual of interest on seriously delinquent loans, and accounting for reverse mortgages.
These issues have been previously reviewed with our regulator, Office of Federal Housing Enterprise Oversight (OFHEO), and based on our current view of these errors, we believe we continue to meet our regulatory capital requirements as well as the 30 percent surplus over our minimum requirement set forth in our September 27, 2004 agreement with the OFHEO.
Statement by Daniel H. Mudd, President and Chief Executive Officer, Fannie Mae
Today, Fannie Mae filed a Form 12b-25 with the U.S. Securities and Exchange Commission (SEC) that provides an update on our progress in completing our accounting review as we continue our financial restatement, as well as a report on our business. In our filing, we are reporting that we have made substantial progress in completing our accounting review. In particular, we have completed the process of identifying accounting issues for review.
Although our review of accounting policies and practices is not complete, we have made significant progress in completing our analysis and determination with respect to the accounting issues we have identified.
As I noted on February 23rd upon release of the Paul, Weiss investigation report, we expect in our continuing restatement effort that we could identify additional accounting matters and, as we resolve them, we will disclose them. In today's filing, we detail several errors we identified in the course of our accounting review that were not previously disclosed in our SEC filings or described in the Paul, Weiss report.
These issues include accounting for certain investment securities at the incorrect cost basis; accounting for certain guaranty fees and obligations in connection with a small portion of Fannie Mae mortgage backed securities trusts; and certain loan-related accounting matters, such as accounting for real estate-owned and foreclosed property expense, accounting for troubled debt restructurings, accounting for the accrual of interest on seriously delinquent loans, and accounting for reverse mortgages.
These issues have been previously reviewed with our regulator, Office of Federal Housing Enterprise Oversight (OFHEO), and based on our current view of these errors, we believe we continue to meet our regulatory capital requirements as well as the 30 percent surplus over our minimum requirement set forth in our September 27, 2004 agreement with the OFHEO.
posted by Kirby P at 8:30 PM
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