Fannie Mae

Last edited by Ian Elwood on July 22, 2008 - 3:55pm

Company Snapshot:

The Federal National Mortgage Association (AKA Fannie Mae) is a public company operating under federal charter and is the US's primary source for mortgage funding, financing one of every five home loans. Fannie Mae buys mortgages from lenders and resells them, transferring risk from lenders and allowing them to offer mortgages to those who may not otherwise qualify. The company was hit hard by the subprime mortgage crisis of 2007 and had to be rescued by the Federal Reserve.

Fannie Mae is a government-sponsored enterprise (“GSE”) chartered by the U.S. Congress. Its regulators include the Office of Federal Housing Enterprise Oversight (“OFHEO”), the Department of Housing and Urban Development (“HUD”), the Securities and Exchange Commission (“SEC”), and the Department of the Treasury. The U.S. government does not guarantee, directly or indirectly, the company's securities or other obligations.

Ownership status:

Publicly traded

Number of employees worldwide:

5700 (2007)

Chief executive officer:

Daniel H. (Dan) Mudd

2008 Global Fortune 500 rank:

161

Website:

Fannie Mae Home Page

Tel:

(202) 752-7000 Corporate Headquarters

Corporate accountability

Accountability overview:

In 2004 Fannie Mae underwent an accounting scandal over $11 billion in unstated funds. The SEC fined Fannie Mae $400 million for the offense as of May 2006. Due to the subprime mortgage crisis of 2008, Fannie Mae and Freddie Mac have asked for a federal bailout that has been estimated to cost $25 billion.

In April of 2008 Fannie Mae Board Chairman and Chief Executive Officer (CEO) Franklin D. Raines, former Chief Financial Officer (CFO) J. Timothy Howard and former Controller Leanne Spencer were ordered by the Office of Housing Enterprise Federal Oversight to pay $42.3 Million USD and cease working for or contracting for Fannie Mae. The reason for this order was because the executives, "...undertook inappropriate earnings management, failed to ensure that adequate internal controls were put in place, released misleading financial reports and permitted the accounting function to operate without adequate resources."

Anti-competitive and consumer protection:

Antitrust Lawsuits

Since January 18, 2005, Fannie Mae has been served with 11 class action complaints. The suits allege that Freddie Mac and Fannie Mae violated federal and state antitrust and consumer protection statutes by fixing, raising, maintaining and stabilizing the price of guaranty fees.