Jan. 11 (Bloomberg) -- Michael J. Williams will step down as chief executive officer of Fannie Mae, the mortgage finance guarantor controlled by U.S. regulators, the company announced.
Williams, who spent 21 years at Fannie Mae and helped guide its transition to government control, will continue as chief executive officer and president until a successor is named. The Washington-based company reported the departure yesterday in a filing with the Securities and Exchange Commission.
“I decided the time is right to turn over the reins to a new leader,” Williams said in a statement. “As I told our employees today, I am extremely proud of what we have achieved together, and I am confident that they will continue to make a positive difference.”
Williams, 54, became head of Fannie Mae in 2009, soon after mounting loan losses forced the company and its smaller rival, Freddie Mac, into U.S. government conservatorship. President Barack Obama and members of Congress are exploring ways to wind down the two companies.
Since 2008, the companies have been controlled largely by their government regulator, the Federal Housing Finance Agency, which is charged with conserving their assets and minimizing taxpayer losses.
Freddie Mac Chief Executive Officer Charles E. Haldeman, 62, announced his departure in October. He remains on the job awaiting appointment of a successor.
Williams took charge of the company well after its heyday. Fannie Mae shares hit an all-time high of $84 in 2001 before it restated earnings in 2006 to show $6.3 billion in losses.
In the decade before their government takeover, Fannie Mae and Freddie Mac spent a combined $174 million to lobby the government -- more than General Electric Co., according to the Center for Responsive Politics. The FHFA halted all political activity by the two companies when it took control in September 2008.
Since 2006, home prices have fallen more than a third from their peak and wiped out $7 trillion in household wealth. The decline has forced Washington policymakers to question the government’s role in mortgage finance and explore ways to wean the industry from its reliance on government guarantees sold by Fannie Mae and Freddie Mac.
The mortgage finance guarantors now own or guarantee almost half of residential mortgages. Combined, they have so far cost taxpayers more than $153 billion and continue to report losses from failed loans.
FHFA Acting Director Edward J. DeMarco in 2009 approved two-year pay packages for Williams and Haldeman totaling $17 million. DeMarco defended the compensation as necessary to retain employees with the skills to manage $5 trillion in mortgage assets.
DeMarco said he will work with Fannie Mae’s board to find new leadership for the company.
“As conservator, I am grateful for Mr. Williams’ steadfast dedication to ensuring Fannie Mae meets its public mission of providing stability, liquidity, and affordability to housing finance while both leading his company and working with government officials to that end,” DeMarco said in a written statement.
In addition to serving as CEO, Williams was Fannie Mae’s chief operating officer from 2005 to 2009. Prior to that, he worked in the firm’s e-commerce and customer applications and technology integration divisions.
--Editors: Maura Reynolds, Gregory Mott
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