The chief executive and top financial officer at mortgage giant Fannie Mae (FNM) were forced out of the company Tuesday as the nation's second largest financial institution struggled to deal with revelations of serious financial reporting problems.

Chief executive Franklin Raines (search) said in a statement issued late Tuesday that he had decided to resign because of his pledge to hold himself accountable if regulators determined the existence of accounting errors.

Recent revelations from government investigators could result in Fannie Mae being forced to restate $9 billion or more in earnings over the past four years.

"By my early retirement, I have held myself accountable," Raines said.

Industry and congressional sources said Fannie Mae's board had been pressured to ask for the resignations of both Raines and chief financial officer Timothy Howard (search) by the company's chief regulator, the Office of Federal Housing Enterprise Oversight (search). These sources, who spoke on condition of anonymity, said Howard had also resigned.

In a statement, Rep. Richard Baker, R-La., the chairman of a House Financial Services subcommittee that oversees Fannie Mae, said: "Given the unbelievable statements Fannie executives made at our last hearing, this action was entirely necessary. I commend OFHEO for insisting on these first steps toward rebuilding trust in the company and I thank Fannie's board for recognizing their necessity."

Rep. Barney Frank, the top Democrat on the Financial Services Committee, said the panel's job in the new Congress "will be to improve the regulatory system in a way that will further preserve safety and soundness."