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Fannie Shuffles Its Top Leaders
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Fannie's board endorsed Mudd and his turnaround plan.
"The Board of Directors is firmly committed to Dan Mudd, the management restructuring, and the strategic objectives," Chairman Stephen B. Ashley said in a statement.
Fannie Mae and Freddie Mac have been trying to ensure that they have enough capital to meet regulatory standards and absorb losses that are expected to continue through the rest of the year. Fannie said earlier this month that it is taking a variety of steps to avoid becoming undercapitalized, including cutting its dividend and annual operating costs, no longer buying certain kinds of mortgages and charging higher fees to investors to guarantee mortgage-backed securities.
Freddie Mac, for its part, is looking for a new chief executive to replace Richard F. Syron, the company's longtime head who also serves as chairman. The company has been searching as part of an agreement with its federal regulator to split the roles of chairman and chief executive.
Some analysts said it could be detrimental if either company's chief executive left during this unstable period.
"In the midst of this turmoil it would be difficult if the head of either enterprise were to leave," said Jaret Seiberg, policy analyst at the Stanford Group, a financial services firm in the District.
Fannie and Freddie's shares have regained ground this week as concerns that the companies would be taken over by the Treasury, wiping out most shareholder value, eased a bit.
Fannie's stock rose 86 cents, or 15.3 percent, yesterday to close at $6.48. Freddie increased 78 cents, or 19.7 percent, to $4.75. It was the third straight day of gains for both companies.
Fannie's management shake-up was announced after the market closed.
