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Fannie Mae Shuffles Top Executives

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Fannie Mae Shuffles Top Executives

Business

Fannie Mae Shuffles Top Executives

Fannie Mae Shuffles Top Executives

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  • <iframe src="https://www.npr.org/player/embed/94057361/94057344" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
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Troubled mortgage finance giant Fannie Mae has announced a management shakeup, but its chief executive will keep his job.

The company said its chief financial officer has been replaced and its chief business officer will take on an expanded role. Fannie Mae has been struggling to persuade investors that it has the capital to keep operating and avoid a government bailout.

Chief Executive Daniel Mudd said the new team would be responsible for conserving capital and controlling credit losses.

Fannie Mae and its rival Freddie Mac have suffered big losses in the housing market. There's been repeated speculation that they lack the capital to keep operating.

The two companies play a critical role in the housing industry by buying mortgages from lenders and then packaging them into securities.

Throughout Wednesday there was speculation that the Treasury Department was about to make a big announcement about the companies, and the department actually had to put out a news release denying the rumors. Investors are fearful of a government bailout because it would dilute the value of the two companies' stock.

The companies got a vote of confidence Wednesday from Merrill Lynch, which issued a report saying a bailout probably can be avoided this year. That sent their stock price a bit higher.

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But stock in the companies is still down sharply from where it was a year ago.