Fannie Mae May Have to Restate Earnings

WASHINGTON – A day after Fannie Mae agreed to regulators’ demands to boost its capital cushion against risk and revamp its accounting, officials said Tuesday that the possibility of the beleaguered mortgage giant having to restate its earnings had been raised in the negotiations.

With investigations by the Office of Federal Housing Enterprise Oversight and the Securities and Exchange Commission still underway, it isn’t known whether the massive recalculations ordered for Fannie Mae by the housing oversight office will force the company to correct its past earnings.

In discussions with Fannie Mae directors that began last week, the OFHEO regulators “told the Fannie Mae board it is one of the issues the board will have to consider in the process of correcting its accounting,” OFHEO spokeswoman Corinne Russell said. Janice Daue, a spokeswoman for Fannie Mae, confirmed that the issue of a possible restatement had been discussed.

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