And they are surprised to find out that the government and it's partners cook their books?

Serious Problems Found by Regulators at Fannie Mae, Prompting SEC Inquiry

By Marcy Gordon The Associated Press
Published: Sep 22, 2004

WASHINGTON (AP) - Regulators have found serious accounting problems at mortgage giant Fannie Mae, prompting an inquiry by the Securities and Exchange Commission and calling into question its financial soundness, the company disclosed Wednesday. Its shares dropped nearly 7 percent.

In at least one instance, the regulators found, it appeared that the government-sponsored company put off some accounting for expenses to a future reporting period in order to meet earnings targets that brought bonuses for executives.

The Fannie Mae board has named a special committee of outside directors to respond to the allegations by the Office of Federal Housing Enterprise Oversight.

Fannie Mae, the second-largest U.S. financial institution behind Citigroup Inc., also is the second largest seller of securities behind the U.S. Treasury. It uses those funds to buy trillions of dollars in home mortgages from lenders, which it says provides more liquidity and lower mortgage rates to home buyers. If Fannie Mae is found to have violated accounting regulations, it could be ordered to decrease its financial leverage by raising fresh capital or buying fewer mortgages - potentially making it harder for some buyers to obtain financing for their home purchases.

The developments Wednesday surprised financial experts and Wall Street. A little more than a year ago, Freddie Mac - Fannie Mae's sister agency and competitor in the multitrillion-dollar home mortgage market - disclosed that it had understated profits by some $4.5 billion for 2000-2002 in an effort to smooth earnings. Fannie Mae's accounting then came under close government scrutiny, though its leaders insisted that it had no problems of that type.

-------------------------------------------------------------------------------------

And they are just now find out? Horeshit!

These problems have been known for quite sometime. Here is a link to the Daily Reckcogning Search. Just type in Fannie Mae to review the results. And here at Google, and one more.

--WP