Fannie Mae Investigation Extended

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Mortgage finance giant Fannie Mae (FNM), whose accounting problems are expected to result in a multibillion-dollar profit restatement, on Thursday said its investigation now included an assessment of accounting for insurance policies.

Fannie Mae said it has identified one mortgage insurance policy that should not have been accounted for as insurance.

The company said the error will impact reported earnings for some previous periods, but it should not have a cumulative impact on Fannie's financial condition as of September 30, 2005.

Fannie Mae, in a filing with the U.S. Securities and Exchange Commission also said it made errors in accounting for Low Income Housing Tax Credit investments and some synthetic fuel investments.