Fannie Mae Wednesday informed the Securities and Exchange Commission it would not file a second-quarter financial report on time.
The news was expected, as Fannie Mae hasn’t filed a quarterly report since the second quarter of 2004, when the government-sponsored mortgage repurchaser became embroiled in an accounting scandal.
Fannie Mae has capped its lending portfolio and suspended regular financial reporting as the company goes back and puts its books in order, which regulators say were cooked to provide large bonuses for since-departed executives.
Fannie Mae spokeswoman Janis Smith said the company plans to complete a restatement of earnings through 2004 by the end of this year. The next step, she said, will be to catch up with financial reporting for 2005 and 2006. No timetable has been set for that work.
In May, the Office of Federal Housing Enterprise Oversight estimated that Fannie Mae overstated reported income and capital by $10.6 billion from 1998 to 2004. Fannie Mae agreed to pay $400 million in fines and implement corrective measures as part of settlements with OFHEO and the Securities and Exchange Commission.
Freddie Mac has also capped its mortgage portfolio and suspended quarterly financial reporting in the wake of similar charges. OFHEO fined the company $125 million after a 2003 investigation discovered accounting irregularities that led to a $5 billion restatement of earnings and a management shakedown.
In April, Freddie Mac agreed to pay $410 million to settle securities class-action and shareholder derivative lawsuits stemming from accounting mistakes that led the company to restate three years of earnings.
