Fannie Mae to pay ex-CEO Franklin Raines $2.6 million

November 15, 2006

OFHEO may seek to recover bonus money paid to top Fannie execs


Innam News

Fannie Mae will pay $2.6 million to settle a pay dispute with former chief executive officer Franklin Raines, the government-sponsored mortgage repurchaser announced in a Securities and Exchange Commission filing.

From 1998 to 2003, federal regulators said Raines was paid more than $90 million, including $52 million in bonuses tied to earnings that have since been restated. He received a $19 million severance package when he took early retirement in December 2004 in the wake of an accounting and management scandal.

Raines said he was owed more under his employment contract, and an outside arbitrator was used to arrive at the $2.6 million settlement.

Raines and Timothy Howard, Fannie Mae's former chief financial officer, could face a civil lawsuit by the Office of Federal Housing Enterprise Oversight (OFHEO) to recover some bonuses that were tied to earnings.

From 1998 to 2004, OFHEO estimates Fannie Mae overstated reported income and capital by $10.6 billion. The company agreed to pay $400 million in fines as part of settlements with OFHEO and the Securities and Exchange Commission.

OFHEO also fined Fannie Mae's sister company, Freddie Mac, $125 million after a 2003 investigation led to a $5 billion restatement of earnings.

Copyright 2006 Innam News


Contact ALTA at 202-296-3671 or communications@alta.org.

SoftPro, based in Raleigh, NC, offers a mature suite of products, designed specifically for the closing and title industry. Our mission is to serve our client base, with best-in-class products and services. Our products are modular so we don't force you to buy anything you don't need. You can always add on as your business grows. Unlike other software companies, we view the sale as the beginning of the relationship rather than the end. North American Title Insurance Company (NATIC) is a seasoned title insurance underwriter, helping title agents to achieve their individual business goals for more than 50 years. Today, the company conducts real estate settlement services in 39 states and the District of Columbia through a network of experienced, independent agents.