Elliott
Elite Member
- Joined
- Apr 23, 2002
- Professional Status
- Certified General Appraiser
- State
- Oregon
Nice to hear a story about a little guy who
may have had his arm twisted, but so far
is just doing his job.
elliott
House Alarm
In Fannie Mae Probe, Watchdog
Has Started to Show Its Teeth
Mortgage Giant Could Face
Shake-Up After Report;
Falling Rates Pose Problem
Directors Consider Options
By JAMES R. HAGERTY and JOHN D. MCKINNON
Staff Reporters of THE WALL STREET JOURNAL
September 27, 2004; Page A1
WASHINGTON -- Armando Falcon Jr., a soft-spoken financial regulator who relaxes by playing poker with friends, seemed to hold a weak hand when he took on Fannie Mae, the biggest player in U.S. mortgage finance.
Mr. Falcon heads one of the more obscure agencies in Washington -- the Office of Federal Housing Enterprise Oversight, or Ofheo, long derided as toothless in its role of monitoring Fannie and its smaller rival, Freddie Mac. Mr. Falcon has about 180 staff members, drives a 15-year-old Volvo and last year earned $158,100.
Fannie Mae -- with 5,000 employees, legendary lobbying skills and assets of $1 trillion -- is the nation's second-largest financial company after Citigroup Inc. Its chief executive, Franklin D. Raines, a former Rhodes scholar, has served as President Clinton's budget chief and is often mentioned as a possible future Treasury Secretary. Last year, his compensation came to about $20 million.
But in his probe of Fannie Mae, Mr. Falcon has taken the offensive. Last week, he released a 200-page report alleging that Fannie's accounting practices have been designed to skirt rules, smooth out earnings and apparently, in at least one case, fatten executive bonuses. By plunking down a long list of unproven but serious allegations, he has forced Fannie's board into a tight position.
A committee of outside directors will have to decide whether to fight Ofheo -- which could be a long and costly process, prolonging the uncertainty that chopped 15% off Fannie's share price last week -- or seek a quick settlement. The latter option might involve dismissing executives or raising minimum capital requirements. Fannie and Ofheo were negotiating through the weekend on a significant increase in the company's capital requirements, according to a person with knowledge of the situation. The regulator previously required Freddie Mac to hold 30% more capital than its usual minimum requirement until the company can clean up its books in the wake of its 2003 accounting scandal.
may have had his arm twisted, but so far
is just doing his job.
elliott
House Alarm
In Fannie Mae Probe, Watchdog
Has Started to Show Its Teeth
Mortgage Giant Could Face
Shake-Up After Report;
Falling Rates Pose Problem
Directors Consider Options
By JAMES R. HAGERTY and JOHN D. MCKINNON
Staff Reporters of THE WALL STREET JOURNAL
September 27, 2004; Page A1
WASHINGTON -- Armando Falcon Jr., a soft-spoken financial regulator who relaxes by playing poker with friends, seemed to hold a weak hand when he took on Fannie Mae, the biggest player in U.S. mortgage finance.
Mr. Falcon heads one of the more obscure agencies in Washington -- the Office of Federal Housing Enterprise Oversight, or Ofheo, long derided as toothless in its role of monitoring Fannie and its smaller rival, Freddie Mac. Mr. Falcon has about 180 staff members, drives a 15-year-old Volvo and last year earned $158,100.
Fannie Mae -- with 5,000 employees, legendary lobbying skills and assets of $1 trillion -- is the nation's second-largest financial company after Citigroup Inc. Its chief executive, Franklin D. Raines, a former Rhodes scholar, has served as President Clinton's budget chief and is often mentioned as a possible future Treasury Secretary. Last year, his compensation came to about $20 million.
But in his probe of Fannie Mae, Mr. Falcon has taken the offensive. Last week, he released a 200-page report alleging that Fannie's accounting practices have been designed to skirt rules, smooth out earnings and apparently, in at least one case, fatten executive bonuses. By plunking down a long list of unproven but serious allegations, he has forced Fannie's board into a tight position.
A committee of outside directors will have to decide whether to fight Ofheo -- which could be a long and costly process, prolonging the uncertainty that chopped 15% off Fannie's share price last week -- or seek a quick settlement. The latter option might involve dismissing executives or raising minimum capital requirements. Fannie and Ofheo were negotiating through the weekend on a significant increase in the company's capital requirements, according to a person with knowledge of the situation. The regulator previously required Freddie Mac to hold 30% more capital than its usual minimum requirement until the company can clean up its books in the wake of its 2003 accounting scandal.
