FREDDIE MAC Shakeup casts shadow on the housing market

The company chief was fired for not cooperating with an accounting review.
WASHINGTON (AP) -- News that mortgage-market giant Freddie Mac had fired its president over his apparent recalcitrance in an accounting probe has jolted the stock market and raised concern about a possible impact on the housing market, one of the few bright spots in the economy.
In a surprise shakeup, Freddie Mac said it had fired the president and chief operating officer, David Glenn, because he didn't fully cooperate with an internal review of the company's accounting -- now under investigation by federal regulators.
The government-sponsored company whose stock is widely traded also said Monday that chairman and chief executive Leland Brendsel had resigned, along with Vaughn Clarke, the company's executive vice president and chief financial officer.
Some senior lawmakers expressed concern about the possible impact of Freddie Mac's troubles on the housing market, as banks could sell fewer mortgages to the company and the international stream of capital into the U.S. mortgage market could be reduced.
The federal agency that oversees Freddie Mac, the Office of Federal Housing Enterprise Oversight, is investigating the company's accounting.
Dismissal
Freddie Mac said it had dismissed Glenn "because of serious questions as to the timeliness and completeness of his cooperation and candor" with attorneys engaged in January by the board of directors' audit committee to review the accounting problems that span three years.
The company doesn't believe that fraud or criminal misconduct were involved, Freddie Mac's new chief executive officer and president, Gregory Parseghian, told analysts and reporters in a conference call.
Questions were raised during the call about Glenn's diaries, which were said to be missing some pages while others had been altered. Freddie Mac officials described the diaries as the ousted president's personal records and notes, unrelated to the company's accounting.
In a market roiled over the past year or so by a wave of corporate accounting scandals, news of the shakeup at Freddie Mac worsened a decline on Wall Street on Monday.
Freddie Mac and its larger sister Fannie Mae are major players in the multibillion-dollar home mortgage market, created by Congress to buy home loans from banks and other lenders to supply ready cash.