Freddie Mac Taps Fourth CEO in a Year
Wednesday, July 22, 2009
Freddie Mac named Charles E. Haldeman Jr. on Tuesday as its new chief executive, the fourth person in a year to hold the top job at the federally controlled mortgage finance giant.
After a year of tumult at McLean-based Freddie Mac, Haldeman will oversee the direction of the company as Congress and the Obama administration mull how to restructure it and its larger rival, District-based Fannie Mae. The government seized both companies in September, installed new leadership and has since been using them to prop up the housing market.
Haldeman may have to walk a tightrope as the head of a troubled company charged with carrying out the government's housing policy objectives, preserving taxpayer dollars and answering to private investors. Freddie Mac has received about $50 billion in taxpayer assistance, and Fannie Mae has received about $34 billion.
In his last job, Haldeman, 60, who goes by Ed, oversaw a restructuring of Massachusetts-based Putnam Investment Management, one of the nation's largest mutual fund and investment advisory firms, after it faced federal and state charges of financial wrongdoing. Haldeman has held jobs in the financial industry since receiving business and law degrees from Harvard University.
He said he now looks forward to being a part of the discussion about Freddie Mac's future.
Obama administration officials "recognize that this is not a permanent condition," he said in an interview. "I know there are strong opinions in Washington. I found it attractive to have the opportunity to participate in those conversations."
Freddie Mac and Fannie Mae play a central role in the government's efforts to reinvigorate the economy.
Both companies are working to modify hundreds of thousands of home loans that are delinquent or at risk of being so. They also are helping the government funnel cash to lenders to fund mortgages, reducing interest rates that home buyers must pay. This is in hopes that more people will buy homes and prices will stop declining.
Haldeman said that being part of the government's housing program appealed to him.
"My hope is that Freddie can do everything possible to ensure that program is a success, to keep as many families in their homes as possible," he said.
When it comes to the future form of the company, Haldeman said he's a "blank slate."
There are many options for the future of Fannie Mae and Freddie Mac. One option that has received a lot of attention from policymakers is turning the firms into public utilities. They would be tightly regulated, but still attract investments from the private sector.
Haldeman replaces former Clinton administration official and turnaround specialist John Koskinen, who has been serving as interim chief executive of Freddie Mac. Koskinen will resume his role as chairman of Freddie Mac's board.
The government's first choice for the job, David Moffett, resigned as chief executive in March after differences with the company's regulator over how it should be run.
Haldeman is slated to take over in August, after Freddie Mac releases its earnings report for April through June. Freddie may request billions more in taxpayer aid at that time.
The Federal Housing Finance Agency, which controls the company in a legal arrangement called a conservatorship, has signed off on Haldeman's appointment.
According to a regulatory filing, Haldeman will be paid a base salary of $900,000. He may receive more than that, subject to government approval, in order to remain competitive with the level of compensation provided by Freddie Mac's major competitors, depending on what the company's regulator approves. He will also receive relocation benefits, nine months lodging in a local hotel or similar living arrangement and a limited number of flights between Washington and Pennsylvania.