Fannie Mae’s Board of Directors has approved the appointment of Deloitte & Touche LLP as its independent auditor to perform an audit of 2004 and a re-audit of prior period financial statements that will be restated.
The announcement comes in the wake of a top management shakeup, and federal investigations surrounding accounting missteps at the mortgage giant.
“Fannie Mae has committed to work with our safety and soundness regulator, OFHEO, to begin restating the company’s financial statements,” Daniel Mudd, Fannie Mae’s interim CEO said. OFHEO stands for the Office of Federal Housing Enterprise Oversight, the federal agency charged with overseeing Fannie Mae and its sister corporation Freddie Mac.
Fannie Mae is shareholder-owned, but holds a critical government charter for the housing industry. The company buys mortgages, repackages them and sells them to investors in order to keep a constant flow of funds in the nation’s home loan industry.
The board also announced today that in accordance with its agreement with OFHEO, it has named Adolfo Marzol to serve as the interim chief risk officer for the company. Marzol currently serves as Fannie Mae’s senior vice president for corporate strategy. Prior to this position, Marzol served as the chief credit officer for the company.
Fannie Mae’s CEO, Franklin Raines, took early retirement, and its chief financial officer, Timothy Howard, resigned Dec. 21. The two left in the wake of a Securities and Exchange Commission directive to make accounting corrections that could knock out some $9 billion of Fannie Mae’s past profit.
In addition, the company today announced that on Dec. 30, Timothy Howard resigned from its Board of Directors, effective immediately.
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