Portfolio Cap Imposed on Fannie as GSE Settles Federal Investigations at a Cost of $400 Million
May 26, 2006
Fannie Mae this week agreed to cough up $400 million to settle charges of mismanagement and bad accounting practices brought by federal regulators – but a bigger issue for the mortgage securities market may be the cap on Fannie’s mortgage investment portfolio included as part of the deal. Under an agreement with the Office of Federal Housing Enterprise Oversight and the Securities and Exchange Commission, Fannie’s retained portfolio will be capped at $727.2 billion …