New bookkeeping issues found at Fannie Mae

Fannie Mae said Wednesday its federal regulator has identified several accounting and internal control issues and raised new questions about the mortgage funder’s accounting in an ongoing probe.

Fannie said its regulator has identified policies that appear inconsistent with generally accepted accounting principles and internal control deficiencies that the agency believes may raise safety and soundness concerns.

The accounting issues raised by the regulator include securities accounting, loan accounting consolidations and practices to smooth certain income and expense amounts.

The regulator, the Office of Federal Housing Enterprise Oversight, also identified new developments related to FAS-91 — an accounting standard for nonrefundable fees and costs associated with originating or acquiring loans.

OFHEO has not completed its review of Fannie’s accounting, the company said.

Fannie Mae, the No. 1 U.S. mortgage finance company, has said it could restate as much as $9 billion in earnings based on accounting problems previously identified by the regulator, known as OFHEO, and the U.S. Securities and Exchange Commission.

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OFHEO also approved a capital restoration plan that gives the mortgage funder until Sept. 30 to boost its surplus capital, Fannie said.

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Fannie Mae plans to meet that target by reducing its mortgage portfolio through mortgage liquidations and increasing core capital through retained earnings, the company said.

The capital plan assumes no increase in the common stock dividend, Fannie Mae said.