(by Roy Deng)

On Wednesday, the U.S. biggest mortgage lender Fannie Mae’s top managers will defend themselves before Congress as charged of violating accounting rules.

Earlier this year, the U.S. Justice Department launched a probe suspecting the U.S. mortgage giant of manipulating of its books to meet earning targets within the recent years. The main Fannie’s regulator the Office of Federal Housing Enterprise Oversight (OFHEO) said the company allowed its senior executives to get a lot of money in bonuses for accounting fraud.

House of Representatives Financial Services panel wants now to see Fannie’s Chief Executive Franklin Raines, Chief Financial Officer Timothy Howard and board member Ann Korologos and the head of the company’s federal regulatory office Armando Falcon.

Fannie Mae, as well as its younger sibling Freddie Mac, owned or had guaranteed 46% of the $7.8 trillion in U.S. residential mortgage debt outstanding. Investors from all over the globe now hold approx of around $1.5 trillion.

"Regulators can be confident in the day-to-day business operations and routine management decisions," said Mr Raines, expressing strong degree of confidence in the company’s activity.

Fannie Mae has already agreed to do recounting and follow OFHEO’s advises in its further activity. Under the terms, Fannie Mae must hold at least 30% more capital than its ordinary minimum requirement within nine months. According to Fannie’s latest financial results, OFHEO minimum capital requirement is now reaches $9 billion. That will definitely lead to the company increase its capital to $5 billion from prior estimated $4 billion, specialists say.