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Freddie Mac may be close to settlement

Dec. 9, 2003 at 10:55 AM   |   Comments

WASHINGTON, Dec. 9 (UPI) -- Federal regulators investigating Freddie Mac's accounting are seeking $100 million or more from the company to settle possible civil charges.

However, such a settlement could be relatively painless for the company which had a reported net income of more than $10 billion for 2002.

People close to the situation told the Wall Street Journal the negotiations between Freddie Mac and its regulator, the Office of Federal Housing Enterprise Oversight, are continuing, and the final settlement could be far smaller.

Analysts say they believe Freddie Mac officials are eager to reach a settlement on the alleged accounting abuses, the Journal said.

Late last month, Freddie Mac completed a long-delayed restatement of past earnings, concluding that it understated results through 2002 by nearly $5 billion. Sunday, the company announced a new chief executive, former American Stock Exchange head Richard Syron.

"The settlement is another big piece" that Freddie Mac needs to put its woes behind it, said Howard Glaser, a Washington mortgage-industry consultant who has done work for Freddie Mac.

© 2003 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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