If you thought that things could not get much stranger at Freddie Mac (NYSE: FRE) or at Fannie Mae (NYSE: FNM), they may have taken an even stranger turn than most could imagine.  David Kellerman, the acting Chief Financial Officer and Senior VP at Freddie Mac, was found dead early this morning from an apparent suicide at his home in Virginia.

A report from WUSA TV in Washington D.C. said that police officers responded to his home around 5:00 AM after being summoned by his wife.  He was the acting CFO since September, but had been with Freddie Mac for about 16 years.

Then this morning came reports from the WSJ that the SEC had been questioning Freddie Mac executives about possible accounting violations.  That part is not a surprise when you consider what has occurred there and at Fannie Mae and we’d be shocked if those “questioning” comments were not up and down just about the entire gamut of these government sponsored entities.

We have been under the opinion that many scandals and future management issues will be front and center at these two GSE’s because of the rubber stamp policies and loose accounting issues.  It is sad when you see news of this sort, and unfortunately it only rings a bit of the same tune as the suicide of J. Clifford Baxter during the Enron scandal.  Many executives can arguably claim that they were never aware of the financial side of the business, but the buck just about always stops with the CFO as that position is supposed to know the status of the books better than any other person inside or outside of the company.

Freddie Mac shares are down 9% at $0.78 in early trading this morning.  To show how intertwined these GSE’s are to each other, Fannie Mae is trading down 7% at $0.79 in sympathy.

JON C. OGG