Fannie Mae may have to restate prior years' earnings, the US Office of Federal Housing Enterprise Oversight has revealed.
Following a forensic accounting review by its regulator, the OFHEO also noted that a restatement of Fannie's capital calculations is a possibility as well.
OFHEO made the disclosure in a release on fourth quarter capital calculations of Fannie and its chief competitor, Freddie Mac. The statement concerning the possibility of a Fannie restatement was mentioned at the bottom of page one and got little notice until late on the day of its release.
No dollar figures were mentioned. Fannie's stock closed down less than a $1 on the day. Morgan Stanley analyst Ken Posner said the statement by OFHEO contains no new information and that the market was already well aware of the pending forensic audit.
He says: “If there were any preliminary conclusions OFHEO would have to say it instead of hinting at it.”
Last year Freddie Mac revised previous years' earnings upward by $5bn.