He is the former chairman and chief executive officer of the Federal National Mortgage Association, commonly known as Fannie Mae, who served as White House budget director under President Bill Clinton.

In 1969, Raines first worked in national politics, preparing a report for the Nixon administration on the causes and patterns of youth unrest around the country related to the Vietnam War.

In 1991 he became Fannie's Mae's vice chairman, a post he left in 1996 in order to join the Clinton Administration as the director of the U.S. Office of Management and Budget, where he served until 1998.

He was accused by The Office of Federal Housing Enterprise Oversight (OFHEO), the regulating body of Fannie Mae, of abetting widespread accounting errors, which included the shifting of losses so senior executives, such as himself, could earn large bonuses.

The three executives maintained their denial of the charges but agreed to the payment of fines totaling about $3 million, which were paid by Fannie's insurance policies.

[citation needed] The OFHEO press release said Raines also gave up an estimated $5.3 million of "other benefits" said to be related to his pension and forgone bonuses.

[11] A statement issued by Raines said of the consent order, it "is consistent with my acceptance of accountability as the leader of Fannie Mae and with my strong denial of the allegations made against me by OFHEO".

On September 20, 2012, Federal District Court Judge Richard Leon granted summary judgment to Raines and dismissed him from the suit.

He wrote, "the OFHEO reports were part of an effort to prepare administrative charges against the individual defendants and raise substantial questions of trustworthiness."

Fannie, which is the largest American financier and guarantor of home mortgages, also agreed to make changes in its corporate culture and accounting procedures and ways of managing risk.

[17] The Investor's Business Daily editorial staff has noted that the expansion of easy credit to home buyers with a lesser ability to pay them back was one of the major contributing factors to the subprime mortgage crisis.

[18] Raines himself stated before Congress, "In 1994, we launched our trillion-dollar commitment, a pledge to provide $1 trillion in financing for 10 million underserved families before the decade was over ...

On December 9, 2008, Raines testified before the United States House Committee on Oversight and Government Reform on Capitol Hill regarding Fannie Mae, Freddie Mac, and financial market instability.

[21][22][23] On July 16, 2008 The Washington Post reported that Franklin Raines had "taken calls from Barack Obama's presidential campaign seeking his advice on mortgage and housing policy matters".