Fannie Mae Faces Huge Hurdle as OFHEO Report Nears

The latest in a long line of bad news for home loan giant Fannie Mae comes in the form of a soon-to-be-released report documenting more accounting problems, according to a story running on Reuters.

The report, compiled over three years by the U.S. Office of Federal Housing Enterprise Oversight, or OFHEO, is due to be released on Tuesday and will primarily cover the myriad ways in which Fannie Mae?s accounting practices seriously deviated from normal accounting practices.

Seeming to expect some sharp criticism, Fannie Mae said long-time board member Thomas Gerrity would step down immediately as chairman of the board’s audit committee and leave the board by the end of 2006.

“The company appears to be undertaking a strategy to anticipate concerns likely to be raised in the OFHEO report on Fannie’s accounting problems,” said Howard Glaser, mortgage industry consultant in Washington and former senior housing official in the Clinton administration.

Fannie Mae has said that it currently has no comment on the report.

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