Agency: Fannie Mae's Cooperation 'Spotty'

Associated Press
Tue Jul 13

WASHINGTON - Fannie Mae's federal regulator said Tuesday the company's cooperation in its ongoing accounting probe has been "spotty" and that it has had to take formal action to get Fannie to comply with some information requests.

The company has missed deadlines, provided incomplete data and delayed in making employees available to the Office of Federal Housing Enterprise Oversight in a broad investigation of Fannie's accounting practices, OFHEO Director Armando Falcon told reporters.

He was speaking after a joint hearing before two House Financial Services subcommittees.

"We've had some instances where deadlines have been missed without explanation, submissions in response to requests for information that weren't complete — even though there were assertions that they were complete," Falcon said. "Also problems in getting employees scheduled for interviews in a timely enough manner."

"The cooperation has been spotty, but there are many demands that are being placed on them with regards to documents and access to employees," Falcon said in response to a question from Rep. Richard Baker, R-La., who chairs the GSE panel. Falcon said OFHEO has taken formal steps against Fannie to get the company to comply in a more timely manner, but hasn't yet had to take enforcement action.

The Louisiana lawmaker volunteered the subcommittee's help in "encouraging a cooperative environment" so that OFHEO can wrap up its probe and more accurately ascertain Fannie's financial condition.

"We're making good progress, but we could be doing better if we had complete submissions and more timely availability of employees," Falcon said. "We want to bring this to a conclusion as soon as possible, and that requires very timely and complete compliance with our requests for information."

Fannie Mae officials declined to comment on Falcon's remarks.

Falcon also told lawmakers that he supported the companies' new affordable housing goals, which were recently proposed by the Department of Housing and Urban Development.

Company officials have said the rule has the potential to negatively affect their business. But Falcon didn't raise any safety or soundness issues when asked about HUD's proposal, for which the public comment period closes on Friday.

Home Loans Articles, Mortgage Loans Articles, Financial News