OFHEO Directs Fannie Mae To Recognize Asset Impairment
|May 7, 2004|
OFHEO Examination Finds Current Accounting Fails to Reflect Earnings Volatility
|OFHEO Letter to Fannie Mae Fank Raines, May 6, 2004 [pdf]|
WASHINGTON, D.C. - Armando Falcon Jr., Director of the Office of Federal Housing Enterprise Oversight (OFHEO) has directed Fannie Mae to account for manufactured housing and aircraft lease securities impairments in the periods in which they occur. The OFHEO examination of Fannie Mae has determined that the Enterprise is not applying the appropriate accounting with respect to determining asset impairments and revenue recognition for these securities.
"Fannie Mae improperly accounted for these assets in a way that fails to reflect losses," said Falcon. "As safety and soundness regulator, we will take the necessary steps to correct this."
Falcon directed Fannie Mae to complete the accounting to recalculate the proper asset impairment on the securities by close of business Friday, May 14, 2004.
The OFHEO examination of Fannie Mae's accounting policies and practices continues.