National Permanent Bank FSB, the second-largest savings institution in Washington, has named former Federal National Mortgage Association officer Stuart A. McFarland as president and chief executive officer.
McFarland replaces Edgar F. Peterson, 65, who is ending a 30-year career with the federally insured savings bank. Peterson, a native of Washington and graduate of Southeastern University, will continue to serve as chairman of the board.
In his four years at Fannie Mae, McFarland, 38, was involved in the restructuring of the congressionally chartered company. He was instrumental in the successful introduction of mortgage-backed securities and in the decision to provide a secondary market in adjustable-rate mortgages -- two measures that made the company more responsive to its markets and ultimately helped it stem the tide of major losses, said Fannie Mae Chairman and Chief Executive Officer David Maxwell.
"During the last four years, Mr. McFarland has made an extraordinary contribution to the revival of this corporation," Maxwell said.
Fannie Mae forms a secondary market for residential mortgages by buying loans from primary lenders such as thrift institutions and mortgage bankers.
Prior to joining Fannie Mae, McFarland was with Ticor Mortgage Insurance Co., a Los Angeles-based firm that insured mortgages and mortgage-backed securities held by Equity Programs Investment Corp., a local real estate syndication company that announced last week that it is delinquent on payments on $1.4 billion on those instruments. Ticor could lose up to $166 million if EPIC defaults on those payments. McFarland, who rose from director of marketing in 1971 to company president when he left in 1982, said that most of the problem EPIC loans were not insured by Ticor until after his departure.
Of his new appointment, McFarland said he joins a savings bank whose "value will increase dramatically" in the near term. The thrift industry in Washington, Maryland and Virginia, he said, is a "very healthy market."
National Permanent, which has $1.2 billion in assets and 14 offices in the District and Maryland, will celebrate its 95th anniversary this October.