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Mark Trahant: What went wrong at Fannie Mae?
Monday, June 5, 2006

"The answer is 6.46.

"You must have 6.46 branded in your brains. You must be able to say it in your sleep, you must be able to recite it forwards and backwards, you must have a raging fire in your belly that burns away all doubts, you must live, breathe and dream 6.46, you must be obsessed by 6.46," a corporate officer told his colleagues in the year 2000.

This was no ordinary company. It was Fannie Mae, a government-sponsored private company that helps banks finance mortgages, and the company vice president was not a cheerleader or a sales manager but the senior vice president in charge of internal audits.

"That tone at the top permeated all levels of Fannie Mae, and the $6.46, the Earnings Per Share goal, became the corporate mantra -- everything else was secondary to hitting the target," says a May 2006 special examination by regulators at the Office of Federal Housing Enterprise Oversight. Even Fannie Mae's auditor "fell under its spell.""

Get the Story:
What went wrong at Fannie Mae? Answer is 6.46 (The Seattle Post-Intelligencer 6/4)

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