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April 19, 2008 / 8:58 AM

Ex-Fannie Mae executives agree to fines

Chairman and Chief Executive Officer of Fannie Mae Franklin Raines is sworn in prior to testifying about a report provided to Congress by Director of the Office of Federal Housing Enterprise Oversight Armando Falcon, entitled 'Allegations of Accounting and Management Failure at Fannie Mae,' at the House Financial Services Committee on October 6, 2004 in Washington. The report alleges that Fannie Mae changed its books to the benefit of its management...(UPI Photo/Michael Kleinfeld)..

Chairman and Chief Executive Officer of Fannie Mae Franklin Raines is sworn in prior to testifying about a report provided to Congress by Director of the Office of Federal Housing Enterprise Oversight Armando Falcon, entitled 'Allegations of Accounting and Management Failure at Fannie Mae,' at the House Financial Services Committee on October 6, 2004 in Washington. The report alleges that Fannie Mae changed its books to the benefit of its management...(UPI Photo/Michael Kleinfeld).. | License Photo

NEW YORK, April 19 (UPI) -- Fannie Mae's former chief executive agreed to pay $24.7 million to settle a suit stemming from an accounting scandal that rocked the lender, officials said.

The Financial Times reported Franklin Raines has agreed to pay $2 million in fines and donate proceeds from the sale of $1.8 million of Fannie Mae stock to homeowner-assistance programs.

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He must also return $5.3 million in other benefits and surrender claims to options on Fannie stock that were valued at $15.6 million when issued, the newspaper reported.

The U.S. Office of Federal Housing Enterprise Oversight also said former Fannie Mae Chief Financial Officer Timothy Howard agreed to pay $6.4 million, while Leanne Spencer, the company's controller, will pay a $275,000 fine.

In accepting the settlement, the men have not admitted to any wrongdoing. Fannie Mae is a government-sponsored lender.

The Office of Federal Housing Enterprise Oversight sued the three former executives in December 2006 to get them to pay more than $215 million in fines and other penalties. The agency alleged they had "improperly manipulated earnings to maximize their bonuses."

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