Home »
Blog » Lenders » Fannie Mae Foreclosures » Moffett Resigns As Freddie Mac Continues Role in Foreclosures
Moffett Resigns As Freddie Mac Continues Role in Foreclosures
March 5th, 2009 by 
Joseph Smith
David Moffett will resign as chief executive officer of Freddie Mac on or before March 13. Moffett, who replaced Richard Syron in September 2008, said he planned to go back to the financial sector. He was U.S. Bancorp’s chief financial officer from 1993 to 2007.
Moffett was appointed CEO of Freddie Mac when the federal government took control of the mortgage firm to save it from collapse in September. The flood of foreclosures overwhelmed the mortgage company, necessitating its rescue by the government to prevent the collapse of the mortgage market and protect millions of homeowners threatened by foreclosures. Freddie Mac, together with Fannie Mae, was put under conservatorship by the Federal Housing Finance Agency. Fannie Mae’s chief executive Daniel Mudd was also replaced by Herb Allison, the previous CEO of TIAA-CREF.
Freddie Mac chairman John Koskinen told reporters Moffett made significant contributions during Freddie’s crucial transition period. Moffett also worked with the FHFA to help control the onslaught of foreclosures and bring back stability to the mortgage and housing sectors.
Last year, Freddie Mac posted losses totaling $25 billion in the third quarter equivalent to $19.44 per share while Fannie Mae posted about the same loss, $25.2 billion, equivalent to $10.27 per share. Freddie Mac has already received almost $14 billion in federal assistance since its takeover and may still require billions of capital infusion for its continued operation. As foreclosures continue to rise in many areas despite mitigation efforts, Freddie Mac may still need about $35 billion to continue to carry out its mandate as part of Obama’s $75 program to avert foreclosures.
Under President Obama’s Homeowner Stability Initiative, Freddie Mac and Fannie Mae will offer refinancing with low mortgage rates to homeowners who have little or zero equity in their homes. They will help maintain affordable mortgage rates and help stabilize the mortgage market. These two mortgage firms will also continue to be supported with funding by the Treasury Department. The Treasury will increase its preferred stock purchase agreements with the mortgage firms from $100 billion each to $200 billion each. It will also continue to buy Fannie Mae and Freddie Mac’s mortgage-backed securities to help promote liquidity in the housing market battered by foreclosures.
