Although some residential MBS market professionals said the Office of Federal Housing Enterprise Oversight (OFHEO) came down a bit severely on Fannie Mae last week, they say the agency's disciplinary recommendations will not materially impact the MBS market, or damage the GSE's credit standing among investors.

Last Tuesday, the OFHEO released its long-awaited report on its examination of Fannie Mae's accounting practices, after sifting through eight million pages of documents. In a blistering summary, the OFHEO said the mortgage corporation put up a facade as one of the lowest-risk and best in class institutions in terms of its internal management practices.

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