Freddie Mac, the mortgage finance firm controlled by the U.S., will name Christopher S. Lynch to replace John Koskinen as non-executive board chairman, according to four people with direct knowledge of the matter.
Fannie Mae and Freddie Mac , the housing-finance companies supported by U.S. taxpayers, should take advantage of demand for government-backed mortgage debt and sell their holdings, according to Pacific Investment Management Co.
Daniel Mudd, the former chief executive officer of Fannie Mae, and Richard Syron, ex-CEO of Freddie Mac, were sued by the U.S. Securities and Exchange Commission for understating by hundreds of billions of dollars the subprime loans held by the firms.
As the housing market deteriorated in April 2007, Fannie Mae Chief Executive Officer Daniel Mudd reported to Congress on his company’s health. The firm’s exposure to subprime loans, he told lawmakers, “remains minimal, less than 2.5 percent of our book.”
The odds of credit rating downgrades on the bonds of Fannie Mae and Freddie Mac rose after lawmakers tapped the government-supported mortgage companies to pay for last month’s extension of a payroll tax cut, according to Bank of America Corp.
Bank of America Corp. ’s agreement to settle Fannie Mae and Freddie Mac’s demands it buy back billions of dollars in faulty loans may pave the way for U.S. lenders to resolve similar disputes with the government-sponsored entities, easing investors’ concerns that costs may surge.
Investors seeking to buy higher yielding, riskier slices of home-loan bonds sold yesterday by EverBank Financial Corp. were told they’d have a better shot if they also purchased some of the AAA rated classes, showing weaker demand for the top-ranked debt.