In some editions of yesterday's Washington Post, Ruth Prokop was incorrectly indentified in a photo caption as counsel of Federal National Mortage Association. She is general counsel of the Department of Housing and Urban Development and a FNMA board member.
Credit another round in the fight for Fannie Mae to the corporation's slow-taking but crafty, board chairman.
At the firm's annual meeting here yesterday, Allan Oakley Hunter demonstrated again how he has managed to keep his job in this city of politics, despite several changes in national administrations.
To anxious stockholders of Federal National Mortgage Association (Fannie Mae is its nickname) concerned about a bitter controversy with Secretary of Housing and Urban Development Patricia Roberts Harris, Hunter offered calm assurance that business would continue - at least almost - as usual.
For those Carter administration Democrats who wanted Hunted to pack his bags and leave Fannie Mae more than a year ago, Hunter employed a staple of the politics of compromise - stating that honest differences of opinion exist that could be settled without difficulty and denying that Fannie Mae and HUD are engaged in "war."
And, faced with a significant challenge by an insurgent stockholder turned board candidate, Hunter offered nothing but kind words and a stinging defeat.
Wall Street analyst Elliot Schneider, who mounted a campaign for the board of directors, fell far short of the necessary votes for election despite widespread support in the investment community.
Although Schneider at one time had enough pledges to oust a management candidate for the board, the votes did not materialize at yesterday's meeting in the Capital Hilton - which was recessed for more than an hour to count ballots. Fannie Mae officers convinced large institutional owners of the company's stock, who were leaning toward Schneider, that a vote for the analyst would be unwelcome in political Washington as evidence that Wall Street was attempting to control the firm.
Schneider said yesterday that he decided to run for the board because he disagreed with management's approach to the battle with HUD. Schneider said he supported Hunter's defense of the company against efforts by Secretary Harris to exert new regulatory controls, but disagreed on how the defense was being made.
"Not once, so far as I know, has the company made a special effort to reach the informed body politic that will eventually determine the future role of the company," Schneider said in a speech to more than 200 shareholders.
Apparently aware that management had enough proxy votes to defeat the insurgent's bid. Hunter responded to Schneider with admiration of "his guts, really, in taking a stand and becoming a candidate." But in a response that was longer than Schneider's address, Hunter sought to calm fears about a critical confrontation with HUD.
When the votes were counted, each person on the management slate had at least 39 million votes and Schneider had more than 20 million. Because each stockholder could cast 10 votes for one person or one vote for each of 10 persons, the results indicated that slightly more than 2 million stockholders voted all of their shares for Schneider.
Whether Fannie Mae next year will resemble the company of today was not made clar to the stockholders.
HUD has proposed new regulations over Fannie Mae designed to increase mortgaged support for urban properties.
The firm - which supports a secondary market for home mortgages and is the largest single owner of home loans in the nation - has stated that HUD's proposed rules would force significant operational changes and bring about higher interest rates.
Hunter told the meeting that negotiations are being held with HUD. "We sincerely hope that a resolution can be worked out within a cooperative framework," he said.
Ruth Prokop, general counsel of HUD and a Carter-appointed board member, said only that, when final proposed regulations are published, the department will attach "findings of fact" to support its initiative. Fannie Mae has threatened court action to block the proposed rules if they are enacted.