Facing the Facts at Fannie Mae

Editor's note: The Fannie Mae (FNM Quote) accounting storm has taken its toll on Wall Street, but RealMoney readers were prepared.

Last week, the financial services giant's regulator issued a scathing report criticizing Fannie's bookkeeping. The document zeroed in on the company's accounting for derivatives and suggested that, in at least one case, the Washington-based mortgage giant may have boosted earnings to fatten executive bonuses.

On Monday, Congress said it would hold hearings on the matter, just after Fannie Mae reached an agreement with its regulator that could force the company to raise billions of dollars in new capital. Some observers wonder if CEO Franklin Raines can survive the latest episode questioning his leadership. ...