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Politics : Liberalism: Do You Agree We've Had Enough of It? -- Ignore unavailable to you. Want to Upgrade?

To: sandintoes who wrote (60419)	3/3/2009 8:31:09 AM
From: lorne	2 Recommendations Read Replies (1) \| Respond to of 224729

Freddie Mac CEO Moffett Resigns After Six Months By Dawn Kopecki bloomberg.com March 2 (Bloomberg) -- Freddie Mac Chief Executive Officer David Moffett resigned, six months after being tapped by regulators to lead the mortgage finance-company through its government-run conservatorship. Moffett, 57, “indicated that he wants to return to a role in the financial-services sector,” and the company will name an interim CEO before March 13, McLean, Virginia-based Freddie said in a statement today. The announcement comes the same week as Freddie prepares to report its sixth straight quarterly loss and make a second request for emergency aid from the U.S. Treasury. Freddie reiterated today that it may ask for $30 billion to $35 billion in Treasury capital as the company, along with larger competitor Fannie Mae, struggle with deteriorating credit quality. Freddie, which has reported about $30 billion in losses over five quarters, may have troubles that run deeper than Moffett assessed when he took the job in September, said Paul Miller, an analyst at FBR Capital Markets in Arlington, Virginia. “I think Moffett probably thought he would do this for a year or two years and would be able to take them public again and is finding out that’s not going to happen,” Miller said. “The companies are bigger messes than anyone anticipated six months ago. I’m sure there’s a laundry list of reasons why he left.” A telephone message left at Moffett’s office at Freddie wasn’t immediately returned. Growing Deficits Freddie and Washington-based Fannie are the largest U.S. mortgage-finance companies, owning or guaranteeing about $5.3 trillion of the $12 trillion residential mortgage market. Fannie last week asked the Treasury for $15.2 billion in capital and raised the possibility of requesting more after posting a $25.2 billion fourth-quarter net loss as it wrote down the value of its assets. Fannie said the market conditions that contributed to the loss will “continue and possibly worsen.” The Federal Housing Finance Agency seized Fannie and Freddie on Sept. 6 and forced out management after examiners said the two companies may be at risk of failing amid the worst housing slump since the Great Depression. The Treasury at the time pledged as much as $100 billion for each company as needed when the value of their assets drops below the amount they owe on obligations. “I would imagine he thought there was a chance they could turn it around,” Moshe Orenbuch, an analyst at Barclays Capital in New York, said of Moffett. “The growing deficits probably mean it’s a lot less likely.” ‘Smooth Transition’ FHFA “will work with the Freddie Mac board and management team to ensure a smooth transition and continuation of their important mission of supporting the housing market,” FHFA Director James Lockhart said in an e-mailed statement today. Moffett, a former Carlyle Group executive who was once vice chairman of U.S. Bancorp, “does not have a position lined up at this time” with another company, a Freddie spokeswoman, Sharon McHale, said in a telephone interview. In November, Freddie tapped $13.8 billion in U.S. capital after a record $25.3 billion third-quarter net loss. The U.S. last month doubled the back-up capital available to $200 billion for each company. Fannie said in a Feb. 26 regulatory filing it is focusing on aiding the housing market more than returning to profitability or protecting taxpayers. Fannie and Freddie shares, which were above $30 in March, have been trading at less than $1 since December. Both stocks closed at about 38 cents today in New York Stock Exchange composite trading.