Fannie Courts SEC On Accounting

NEW YORK -- Mortgage finance firm Fannie Mae is trying to get the Securities and Exchange Commission to support an accounting method its own regulator has questioned, according to a published report Thursday.

Support from the SEC may decide whether Fannie must restate past results, The Wall Street Journal reported.

Fannie's regulator, the Office of Federal Housing Enterprise Oversight (OFHEO), says the company may have applied the wrong "accounting guidance" when writing down the value of manufactured housing loan-backed securities and other assets, The Journal said.

Fannie is trying to win the backing of the SEC on the accounting issue because it believes that will lessen the likelihood of a restatement, the paper reported, citing a person briefed on the progress of the inquiry. If the SEC backs the OFHEO way of looking at the situation, Fannie is likely to settle the case and restate some past results, rather than fight it out in court, according to The Journal.

-- NYSCPA.org News Staff

Posted on 5/6/04