Accounting concerns hurt US mortgage giants
Concerns over the accounting practices of US mortgage financiers Fannie Mae and Freddie Mac and a declining number of home purchases has led investors to ditch shares in the two groups.
Since 29 October, when Fannie Mae said it had made ‘honest mistakes’ in its financial statements its share price has dropped by just under 8%.
Financial regulator, the Office of Federal Housing Enterprise Oversight, said the issue highlighted the need for a ‘special review’ of accounting practices at Fannie Mae.
An accounting firm will be hired to help conduct the review and to identify any weaknesses in accounting policies at Fannie.
During the same period, Freddie Mac’s stock had fallen by just under 7%, the Financial Times reported.
However, the S&P 500 index had risen by 0.3% in the same period.