Fannie Mae Erases $6.3 Billion in Profit in Restatement Bringing End to Accounting Scandal

December 6, 2006

By Marcy Gordon, AP Business Writer

WASHINGTON (AP) -- Fannie Mae erased $6.3 billion in profit in a long-awaited restatement Wednesday capping the accounting scandal that stunned financial markets and brought the ouster of top executives and a record fine against the government-sponsored mortgage leader.

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 reworking of its accounting is costing the company some $1 billion this year to conduct. It is the first earnings statement filed by Fannie Mae, which finances one of every five home loans in the United States, since late 2004...MORE