Fannie Mae Shakeup
WASHINGTON Dec 21, 2004 — The chief executive and top financial officer at mortgage giant Fannie Mae were forced out of the company Tuesday as the nation's second largest financial institution struggled to deal with revelations of serious financial reporting problems.
Chief executive Franklin Raines said in a statement issued late Tuesday that he had decided to resign because of his pledge to hold himself accountable if regulators determined the existence of accounting errors.
Recent revelations from government investigators could result in Fannie Mae being forced to restate $9 billion or more in earnings over the past four years.
"By my early retirement, I have held myself accountable," Raines said Industry and congressional sources, who spoke on condition of anonymity, said Fannie Mae's board had been pressured to ask for the resignations of both Raines and chief financial officer Timothy Howard by the company's chief regulator, the Office of Federal Housing Enterprise Oversight.
A Fannie Mae statement announced that Howard had also resigned. The company said it had hired an executive search firm to find replacements for the two men.
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