Fannie Mae(FNM Quote) dipped more than 14% on heavy volume early Friday after the company went on the defensive against a magazine report questioning its accounting measures.
Fortune, in an article published on its Web site Thursday, reported that the government-sponsored mortgage giant was masking its growing credit losses through a change in the way it reports its exposure to risky home loans.
In August, the company reported a credit-loss ratio of between 4 and 6 basis points. When the company last week reported third-quarter financial results -- including a loss that more than doubled -- it said its annualized credit-loss ratio was just 4 basis points. But that calculation was derived through a new accounting methodology from the one used to calculate the range it forecast in August. Using the old methodology, the company's credit loss ratio would be 7.5 basis points, according to Fortune. ...
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