Federal National Mortgage Association

The government will pursue some Fannie Mae executives to recover bonus money they reaped in an accounting scheme if the mortgage giant itself fails to do so, the nominee for a federal oversight post testified. At his confirmation hearing to become permanent director of the Office of Federal Housing Enterprise Oversight, James B. Lockhart also assured senators that he would maintain his independence as the chief regulator of Fannie Mae and its smaller government-sponsored sibling, Freddie Mac.

The Bush administration is starting special reviews of the financial operations of mortgage giants Fannie Mae and Freddie Mac. Housing and Urban Development Secretary Alphonso Jackson and Randal Quarles, Treasury undersecretary for domestic finance, disclosed the reviews by their departments in appearances in Washington. Quarles said Treasury staff will review the department's process for approving the massive mortgage-related debt issued by the government-sponsored companies.

Fannie Mae said Wednesday that it believed a massive review of its accounting had uncovered all of the mortgage giant's bookkeeping errors, clearing the way for the company to complete the restatement of its 2004 earnings by the end of this year. The company disclosed that the multibillion-dollar correction could be less than previously estimated. The government-sponsored company, which finances one of every five U.S.

Mortgage finance giant Fannie Mae avoided criminal prosecution over its alleged multibillion-dollar accounting fraud. The decision was announced Thursday by the government-sponsored company, which was created by Congress to pump money into the $8-trillion home mortgage market. Federal prosecutors in Washington confirmed that they had shut down their investigation of Fannie Mae's faulty accounting after two years.

Fannie Mae said it expected to spend more than $1 billion this year on the massive review of its accounting and preparing financial statements as the mortgage giant pushed to complete it by year-end. The government-sponsored company, which finances one of every five home loans in the U.S., is emerging from an accounting scandal that brought the ouster of top executives and a record $400-million civil fine in a settlement with federal regulators.

The conforming loan limit, perhaps the most intently watched number in the mortgage business, will remain unchanged next year at $417,000. The limit is the legislatively set ceiling on the size of loans that can be purchased or guaranteed by Fannie Mae and Freddie Mac, the two government-sponsored financial institutions that keep local lenders awash in cash for home loans.

Fannie Mae erased $6.3 billion in profit in a long-awaited restatement Wednesday, capping an accounting scandal that stunned financial markets and brought the ouster of top executives and a record fine against the government-sponsored mortgage company. The correction of its earnings from 2001 through June 30, 2004, ordered by the Securities and Exchange Commission two years ago, was well below Fannie Mae's earlier estimate of $10.8 billion.

The federal government filed civil charges Monday against former Fannie Mae chief Franklin Raines and two other former top executives, accusing them of misconduct at the mortgage finance giant that cost shareholders billions of dollars. The Office of Federal Housing Enterprise Oversight, which regulates Fannie Mae, said it was seeking fines and the return of millions in bonus money that the executives earned.

If what goes up must come down, then maybe it was inevitable that Franklin D. Raines' rise through the worlds of business and politics would end. But few who know the soft-spoken businessman envisioned the abrupt landing Raines made days before Christmas when he resigned under pressure as Fannie Mae's chairman and chief executive in the midst of an accounting scandal at the nation's largest mortgage lender.

Perceived U.S. government backing for Fannie Mae and Freddie Mac is worth billions to shareholders but does little to lower mortgage rates for home buyers, Federal Reserve studies said Thursday. The suggestion that the government-sponsored enterprises fall short in their primary task of promoting homeownership comes as Congress considers toughening oversight after accounting scandals at Fannie Mae and Freddie Mac.