NEW YORK, May 7 (UPI) -- Fannie Mae, the mortgage finance giant, improperly accounted for losses on part of its portfolio, federal regulators say.
The move could force Fannie Mae to restate its earnings, according to the Financial Times.
The Office of Federal Housing Enterprise Oversight has been reviewing Fannie Mae accounts following the revelation last year that Freddie Mac, Fannie Mae's smaller sibling, had understated earnings by $5 billion.
Questions were also raised over Fannie Mae's accounting last year after the company revised some figures in its third-quarter earnings statement, blaming "computational" errors.
On Thursday OFHEO questioned Fannie Mae's accounting procedure on mobile homes and aircraft lease securities, arguing that the agency had not fully recognized the fall in the value of its portfolio.
The regulator added that Fannie Mae may have to undertake further "financial analysis" as a result of other findings from its examination. Fannie Mae said it would submit the information OFHEO requested by the regulator's deadline of May 14.
