Fannie Mae has a herculean challenge in front of them. The Government Sponsored Enterprise has to manage the legacy issues of loose underwriting and documentation practices of it’s lender/servicer clients and the fallout from those dubious practices, the present day realities of an economic conditions that have wreaked havoc on home values and employment levels and prospects, the manifestations of these economic realities in the form of delinquencies and foreclosures, and the monumental operational burdens borne of being the Financial Agent and administrator of the HAMP on behalf of Treasury. Let’s not forget that they are still buying and securitizing hundreds of billions of dollars worth of mortgages in their spare time.
I raise these observations not to martyr Fannie Mae, but just to remind folks that there are about 4000 employees at Fannie Mae, many who have lost their nest eggs with the collapse of FNM stock, and are grinding out unenviable workloads without the long term stability once afforded to them. Welcome to the club, right?!?!?
Most of Fannie Mae’s contingent liabilities and operational chaos revolve around the foreclosure prevention and loss mitigation activities on its single-family book of business. These activities involve Fannie Mae’s National Servicing Organization, National Property Disposition Center, and National Underwriting Center all of which are managed out of Dallas, Texas. In short, the Dallas operations are not something to be taken lightly and require leadership that can keep the troops motivated, focused, and executing like hell.
I was overjoyed by the announcement today that Mike Williams, Fannie Mae’s President and Chief Executive, has appointed Terry Edwards to serve as the company's new Executive Vice President, Credit Portfolio Management. Per the announcement, “his duties will include executing the Making Home Affordable program, managing our Real Estate Owned (REO) and loss mitigation activities, ensuring collection and preservation of credit enhancements, as well as overseeing and managing our servicing guidelines and policies.”
Mr. Edwards is no stranger to the mortgage or real estate businesses. He comes to Fannie Mae after a long and impressive career at PHH Mortgage where he was most recently the President and CEO. He successfully navigated PHH Mortgage through markets that claimed most of his competitors. His experience running one of the largest real estate companies, Realogy Corporation, will serve Fannie Mae well as it clears a substantial overhang of REO properties.
Much akin to appointment of David Stevens as FHA Commissioner, this further demonstrates that legitimate and experienced operators are being chosen for critical housing roles in this administration.