Three former Fannie Mae senior executives who had been accused for manipulating the books for six years to meet profit and bonus targets, have all agreed to pay $31.4m (£15.7m) to settle the allegations of accounting fraud in 2004.

Franklin Raines, former head of Fannie Mae, who worked in the Clinton administration and will pay the lion's share of $24.7m, has denied any wrongdoing, while Timothy Howard, ex-chief financial officer, has agreed to pay $6.4m; and ex-controller Leanne Spencer, former controller, $275,000, BBC News reports.

The penalties are nowhere near the $215m sought by the Office of Federal Housing Enterprise Oversight, the government regulator of the US mortgage market.

The multi-billion dollar accounting scandal at Fannie Mae, which finances or guarantees one of every five home loans in the US, left Wall Street shellshocked, resulting in restriction of its capital requirements until recently.

Further reading:

Freddie Mac pays up over fraud

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