WASHINGTON: On March 10, Fannie Mae lashed out at the Financial Times (FT) for what it said was an inaccurate report about its financial condition. (See story, PRWeek, March 15).
In doing so, the mortgage giant implored investors to withhold judgment until it filed its 10-K with the SEC. It did that on March 15, and the results showed a loss on derivative transactions that was not as large as FT projected.
FT said Fannie Mae might have lost as much as $24 billion - losses not yet reflected in its earnings. In its SEC filing, the losses on derivatives were "only" $6.9 billion as of December 31. In a follow-up story, the FT said the difference could be explained by Fannie Mae's use of a post-tax accounting (the FT's $24 billion was a pre-tax figure) and because the FT was not using fourth quarter financials in its calculation - a period when the firm's performance improved. Fannie Mae used that period in its calculation.
Spokespeople for Fannie Mae and the FT did not return a call each seeking comment. Fannie Mae and Freddie Mac have come under attack for their accounting practices.