WASHINGTON, DC -- Fannie Mae (FNM/NYSE) today announced that the Audit Committee of its Board of Directors has approved the engagement of Deloitte & Touche LLP as its independent auditor to perform an audit of 2004 and a re-audit of prior period financial statements which will be restated, as announced in December 2004.

"In our search for a new independent auditor, the company considered leading national accounting firms and determined that the engagement of Deloitte and Touche was in the best interest of the company and its shareholders," said Thomas Gerrity, Chairman of Fannie Mae's Audit Committee. "Their expertise and experience will be critical as we move forward on the company's restatement process."

"Fannie Mae has committed to work with our safety and soundness regulator, OFHEO, to begin restating the company's financial statements," added Daniel Mudd, interim Chief Executive Officer. "Today's announcement is an important step forward."

Gerrity noted that the engagement of Deloitte and Touche is subject to the firm's customary client acceptance process and execution of an engagement letter. Fannie Mae will review the terms of the engagement with OFHEO.

The board also announced today that in accordance with its agreement with OFHEO, it has named Adolfo Marzol to serve as the interim Chief Risk Officer for the company. Marzol currently serves as Fannie Mae's senior vice president for Corporate Strategy. Prior to this position, Marzol served as the Chief Credit Officer for the company.

In addition, the company announced that on December 30, 2004, Timothy Howard resigned from its Board of Directors, effective immediately.