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Fannie Mae Puts Employees on Leave Amid Probe of Apartment Deal

November 01, 2011

Lorraine Woellert and Clea Benson

Oct. 31 (Bloomberg) -- Four Fannie Mae employees were put on administrative leave after the mortgage company was notified that government investigators were examining a transaction with New York-based real estate firm Related Cos., people briefed on the matter said.

Fannie Mae spokeswoman Kelli Parsons confirmed in an e- mailed statement that the inspector general’s office at the company’s regulator, the Federal Housing Finance Agency, “is conducting an investigation of a transaction in our multi-family business” and that employees had been placed on leave. The statement didn’t specify the transaction or the number of employees involved.

David S. Worley, a Fannie Mae senior vice president of multi-family risk management, left the company today, according to one person with knowledge of his departure. Worley didn’t respond to a phone call or an e-mail to his business address. Maureen Davenport, a Fannie Mae spokeswoman, declined to comment on the departure.

In an e-mail to staff today, Fannie Mae Chief Executive Officer Michael Williams said the investigation involves a “single transaction” in the company’s multi-family unit and is unrelated to the mortgage company’s securities.

Earlier this year, Fannie Mae sold Related a share in a portfolio of foreclosed apartment buildings. The closely held developer and property management company, controlled by Stephen M. Ross, has $15 billion in real estate assets.

Joanna Rose, a spokewoman for Related, declined to comment.

Kristine Belisle, a spokeswoman for the inspector general’s office, declined to comment.

Fannie Mae and Freddie Mac have been under government conservatorship and dependent on taxpayer aid since September 2008.

The Wall Street Journal reported the investigation earlier today.

--Editors: Lawrence Roberts, Gregory Mott

To contact the reporter on this story: Lorraine Woellert in Washington at

To contact the editor responsible for this story: Lawrence Roberts at

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