U.S. May Seek Bonuses From Fannie Mae Execs

The government will pursue some Fannie Mae executives to recover bonus money they reaped in an accounting scheme if the mortgage giant itself fails to do so, the nominee for a federal oversight post testified.

At his confirmation hearing to become permanent director of the Office of Federal Housing Enterprise Oversight, James B. Lockhart also assured senators that he would maintain his independence as the chief regulator of Fannie Mae and its smaller government-sponsored sibling, Freddie Mac.

The oversight office, which Lockhart has headed on an acting basis, last month issued a scathing report alleging a six-year accounting fraud at Fannie Mae, the largest U.S. buyer and guarantor of home mortgages.

It said employees manipulated accounting to hit quarterly earnings targets so senior executives could pocket hundreds of millions of dollars in bonuses from 1998 to 2004.