Regulators to Review Fannie Mae

A federal regulatory agency said Monday that it would launch a special review of accounting at mortgage finance company Fannie Mae, saying accounting woes at mortgage buyer Freddie Mac make the review advisable.

“While I do not have specific concerns about Fannie Mae’s accounting practices, such a review would be most prudent under the circumstances,” said the director of the Office of Federal Housing Enterprise Oversight, Armando Falcon, in a letter to lawmakers.

Falcon also asked Congress for $4.5 million to hire forensic accountants for an investigation of Freddie Mac, which replaced its top management in June over an earnings restatement.

Fannie Mae said Monday that its board voted to boost the company’s quarterly dividend to 45 cents a share from 39 cents, its second increase this year. Fannie Mae’s stock gained $1.03 to $71.38 in New York Stock Exchange trading.

Fannie Mae and Freddie Mac are shareholder-owned companies chartered by Congress to help expand U.S. homeownership. They do not lend directly to borrowers but buy mortgages from lenders and repackage them as securities or hold them in their own portfolios.

Fannie Mae executives said the company welcomes scrutiny of its books.