Last Wednesday, Freddie Mac hosted a conference call updating the status of its previously announced re-audit. On the call, the GSE's new management admitted that some accounting policies used in the past were implemented in the context of Freddie's goal to achieve steady earnings growth and that some of the agency's disclosure processes actually fell short of standards that would have been required of Freddie if it were a Securities and Exchange Commission registrant.

It was also revealed in the call that the cumulative impact of the restatement will likely increase retained earnings as of year-end 2002 by a range of $1.5 billion to $4.5 billion.

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