Thursday, November 10, 2005

Fannie Mae confirms $11 billion restatement

From the AP via the Houston Chronicle:

Embattled mortgage giant Fannie Mae said today that it has hired the chief financial officer of MCI Inc. to help it "rebuild and renew," as it disclosed new accounting errors and confirmed it will have to restate earnings by some $11 billion. Its shares fell more than 2 percent.

The government-sponsored company, which finances one of every five home mortgage loans in the United States, also named a new chief operating officer as it again missed a regulatory deadline for filing a financial report — this time for the third quarter.

In a filing with the Securities and Exchange Commission, which has ordered the company to restate earnings back to 2001, Fannie Mae affirmed previous estimates that the correction will total about $11 billion. The company said it likely will not complete the reworking of its accounting before the second half of next year.

In the filing, Fannie Mae also disclosed new accounting problems that have been uncovered in several areas, including recording losses on mortgages and the mortgage-backed securities it guarantees as well as expenses for financing some real estate investments and accounting for low-income housing tax credits and mortgage insurance. The company did not provide an estimate of the amounts of the errors.


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Eleven billion dollars isn't a mistake: it's a corporate accounting lie, plain and simple. Four years after the Enron debacle, it's completely clear that nothing has changed. Of course, that's no surprise with the roosters watching over the hen house. All those "reforms" offered up by Republicans back in 2002 are simply a charade, PR work to calm down rank and file Americans while the wealthy elites can continue their plunder party. The rich are robbing this country blind, and the GOP is making it all possible.

This is all pretty sickening if you dwell on it enough. They really are ripping us off.

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