WASHINGTON: US mortgage giant Fannie Mae blasted the Financial Times (FT) last week for a story it said was inaccurate.
On Wednesday, a front-page FT story reported that Fannie Mae might have lost as much as $24 billion in derivatives transactions in four years that have not yet appeared in the company?s earnings. The report, by New York-based US markets editor Stephen Schurr, said that the liabilities raise ?fresh doubts about the financial health of the mortgage finance giant.?
That morning, Jayne Shontell, Fannie Mae?s SVP of investor relations, released a statement that said the story was ?based on a wholly invented methodology that we told the reporter is wrong. ... The methodology he employed incorrectly calculated unrealized losses, and, as a result, he arrived at an erroneous conclusion. This has resulted in a gross misrepresentation. Anyone who is seriously interested in looking at this should wait for our 10-K filing next week.?
Janice Daue, who works in Fannie Mae?s media relations office, said that the company would not comment beyond the statement.
Schurr referred a call to GCI Group, FT?s PR agency. GCI said that the newspaper would not comment on the situation beyond a one-sentence statement.
?The Financial Times believes it used the best available methodology to estimate Fannie Mae?s unrealized derivatives losses given the company?s lack of disclosure of the actual amount,? the statement read.
Lately, Fannie Mae and sibling Freddie Mac have come under attack for their accounting practices and rapid growth. They now hold about $4 trillion in mortgages. There have been calls in Congress to regulate both Fannie Mae and Freddie Mac more tightly.