Washington (March 1, 2004) -- The office of Federal Housing Enterprise Oversight, the federal regulator that oversees home mortgage giants Fannie Mae and Freddie Mac, raised concerns about some of Fannie's Mae's accounting systems and advised the company to automate them or explain why they don’t need to be automated.

In a letter to Fannie Mae chairman Franklin D. Raines, OFHEO director Armando Falcon Jr. said that a review of the events surrounding a $1 billion error in the company's third quarter 8-K filing last fall "raised concerns about the extensive reliance of Fannie Mae on manual systems (otherwise known as end-user computing systems)."

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