Household HSBC Watch

Senior executives at Fannie Mae manipulated accounting to collect millions in “maximum, undeserved bonuses” and deceive investors, a federal report charged Tuesday. The government-sponsored mortgage company was fined $400 million.

The blistering report by the Office of Federal Housing Enterprise Oversight, the result of an extensive three-year investigation, was issued as Fannie Mae struggles to emerge from an $11 billion accounting scandal. Also Tuesday, the housing oversight agency and the Securities and Exchange Commission announced a $400 million civil penalty against Fannie Mae in a settlement over the alleged accounting manipulation.

“The image of Fannie Mae as one of the lowest-risk and ‘best in class’ institutions was a facade,” James B. Lockhart, the acting director of OFHEO, said in a statement as the report was released. “Our examination found an environment where the ends justified the means. Senior management manipulated accounting, reaped maximum, undeserved bonuses, and prevented the rest of the world from knowing.”

The image of Household International as anything but a high cost predator was never very good after William F. Aldinger took over in 1994. Household International was fined $484 million. The company collected millions in undeserved fees and interest.