Fannie Mae’s CEO, Hugh Frater, and Sheila Bair, the chair of its board, both announced they will resign from the mortgage finance behemoth May 1.
Antony Jenkins, who is currently vice chair of the board’s nominating and corporate governance committee, will also resign May 1.
Fannie Mae’s president, David Benson, will serve as interim CEO and board member, starting May 1, although that decision is subject to approval by Fannie Mae’s conservator, the Federal Housing Finance Agency. Fannie Mae said it plans to conduct a national search for a permanent CEO.
Fannie Mae’s board also elected Michael Heid, who currently chairs the community responsibility and sustainability committee, to succeed Bair as chair of the board.
Fannie Mae did not respond to requests seeking comment.
In a statement, FHFA Acting Director Sandra Thompson said the changes will “assure the continuity and stability necessary for meeting their mission responsibilities in a safe and sound manner.”
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FHFA also said that Diane Nordin would be vice chairman of the board. Nordin currently chairs Fannie Mae’s compensation and human capital committee.
“Fannie Mae will continue to thrive under the experienced leadership team of Mike Heid as Chairman of the Board, Diane Nordin as Vice Chairman, and Dave Benson as Interim CEO in addition to his current duties as President,” said Thompson. “Their deep knowledge of the GSEs and the broader mortgage system will ensure Fannie Mae continues to deliver solutions in response to the challenges facing borrowers in today’s mortgage market.”
In a prepared statement, Bair praised the GSE’s employees for their performance during the pandemic and a change in presidential administration.
“Unfortunately, I have found it difficult to meet the substantial time demands of this position while fulfilling my other Board and advisory responsibilities,” Bair said. “I am very proud of this organization’s many innovations to promote sustainable homeownership, including streamlined refinancings for low-income households, use of rental data in underwriting, and a more progressive fee structure.”
She also said that her successor, Heid, is “the right person to continue and build on our mission work.”
Bair served as the chair of the Federal Deposit Insurance Corporation during the second Bush administration, while FHFA Acting Director Sandra Thompson was FDIC director of supervision and consumer protection. Bair has chaired Fannie Mae’s board since November 2020, the first woman to serve in that role.
Frater has been CEO since March 2019. Prior to that, he was Fannie Mae’s interim CEO. He was previously CEO of Berkadia Commercial Mortgage, which provided advisory and research services for multifamily and commercial properties. Frater was also one of the founders of asset manager BlackRock Inc.
Frater, in a prepared statement, said that he committed to serving three years as CEO when he assumed the role in 2019.
“Given the strides we have made on so many fronts, this is the right time to transition to a new CEO,” said Frater. “Dave knows this company better than anyone else and will provide outstanding leadership, together with our new Board Chair Mike Heid, as the entire enterprise works together to build a more sustainable housing finance market that better serves people across America.”
Heid, the new chair of Fannie Mae’s board, thanked Bair and Frater for their leadership in “unprecedented times.”
“This is a pivotal time for Fannie Mae, and I look forward to working with [Benson], the exceptional Fannie Mae team, and with my colleagues on the Board in service of homeowners and renters across the country,” said Heid.
The leadership shakeup at the GSE follows several waves of high-level departures. Fannie Mae indicated in a disclosure that Kimberly Johnson, its COO, would depart the enterprise in April.
Numerous executives left the enterprise in 2020 and 2021. Sources at Fannie Mae cited a stifling work environment, reduced chances of leaving conservatorship and better pay in the private sector as factors that led to the departures.