Wednesday, March 09, 2005

Agreement Gives Insight Into Fannie Mae Scandal

For some reason the full text of the new supplemental agreement between Fannie Mae and her regulator OFHEO has been unavailble. But the PDF summary offers a glimpse of how really messy things have been inside the mortgage giant.

"The implementation of controls surrounding accounting ledger journal entries,including policies that prohibit the falsification of signatures..address deficiencies in the portfolio accounting systems, such that the systems are able to properly calculate amortization and properly account for certain assets.(!)..The adoption of internal controls that limit the ability of personnel to overwrite database records."(!!)

It is obvious these things were going on. I understand the OFHEO had to demand that FNMs board not do further business with former boss Frankiln Raines. This is looking a lot bigger than Enron.


At 8:27 AM, Anonymous Anonymous said...

The full text of the agreement is available on Fannie Mae's website:

Supplemental OFHEO Agreement (pdf)


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