UPDATE 1-US regulators to settle with ex-Fannie execs-source

(Releads with information from person familiar with the settlement)

NEW YORK, April 17 (Reuters) - U.S. federal regulators will announce a settlement on Friday with former Fannie Mae (FNM.N: Quote, Profile, Research, Stock Buzz) executives over their alleged roles in a 2004 multibillion-dollar accounting scandal, a person familiar with the settlement said on Thursday.

The settlement will conclude two years of litigation brought by Fannie's regulator, the Office of Federal Housing Enterprise Oversight, or OFHEO, against the mortgage company's former chief executive Franklin Raines, and its former chief financial officer Timothy Howard, this person said.

Leanne Spencer, who was the mortgage company's controller is also part of the settlement, according to a report in The Wall Street Journal.

The terms of the settlement were not revealed.

In 2006 Fannie's regulator, the Office of Federal Housing Enterprise Oversight, or OFHEO, filed civil suits against the three former executives seeking millions of dollars in back pay and bonuses from their time at the company during the accounting problems.

In July, attorneys for Raines argued that OFHEO was standing in the way of more than $3.8 million in unpaid bonuses for the former CEO, who resigned in 2004. Howard's lawyers argued he was entitled to an unpaid bonus worth $500,000

A spokeswoman from OFHEO declined to comment on whether a settlement had been reached. Attorneys for Raines, Howard and Spencer did not immediately return calls seeking comment. (Reporting by Emily Chasan and Patrick Rucker in Washington; Editing by Gary Hill and Carol Bishopric)