Fannie Mae announces new CEO
Fannie Mae has announced the appointment of Timothy Mayopoulos as the CEO of government backed firm, after the January announcement that after just two years as CEO, Michael Williams was stepping down for reasons not released.
The government-sponsored entity was put into conservatorship in 2008 to save it from failing, and posted losses of $5.1 billion in the third quarter of 2011 and requested $7.8 billion more in taxpayer support from the Treasury Department, the same month that they were criticized for wasteful spending and for awarding executives exorbitant bonuses despite struggling to perform without further governmental aide.
In December, the Securities and Exchange Commission charged six former Fannie Mae and Freddie Mac executives with civil fraud for misrepresenting their holdings of high-risk mortgage loans, although Williams has come out clean, former Fannie Mae CEO Daniel Mudd was charged. Additionally, two former CEOs of Fannie Mae, James A. Johnson and Franklin Raines were named as recipients of low-cost “Friends of Angelo” loans from Countrywide, a conflict of interest for the two.
Timothy Mayopoulos’ career path
“I am honored with this extraordinary opportunity to lead Fannie Mae during this critical period,” Mayopoulos said in a statement. “We have a responsibility to return value to taxpayers and to contribute our expertise and experience to building a more effective and stable housing finance system for the future.”
In May, Fannie announced it would not require additional bailout money as it had its best quarterly results since 2004. Mayopoulos will take a pay cut from his $2.9 million compensation from Fannie Mae in 2011 (including stock options) to a base salary of $600,000 as legislation recently reduced executive pay at the mortgage giant. He will still be due salary and incentives earned in this year that have been deferred, which will be paid next year.
Edward DeMarco, the head of the Federal Housing Finance Agency, which oversees Fannie and Freddie, said in a statement that Mayopoulos would lead efforts to “continue strengthening Fannie Mae and provide critical foreclosure prevention services as we build the foundation for the secondary mortgage market of the future.”
Mayopoulos has an interesting career that critics will see as marked with deep roots in the financial industry, while supporters will likely see as ambitious and filled with accomplishments. Mayopoulos’ professional timeline is featured below:
- Graduated from Cornell University with a BA in English with distinction.
- Earned his JD cum laude from New York School of Law where he also served as the Editor of the NYU Law Review.
- October 1986 – September 1994: practiced at Davis Polk & Wardwell private law practice.
- October 1994 – April 1996: served in the Office of Independent Counsel during the Whitewater scandal.
- May 1996 – November 2000: Managing Director and Associate General Counsel at Donaldson, Lufkin and Jenrette.
- November 2000 – May 2001: Managing Director and Senior Departmental General Counsel at Americas of Credit Suisse First Boston.
- January 2002 – January 2004: Managing Director and General Counsel at Americas of Deutsche Bank.
- January 2004 – December 2008: Executive Vice President, General Counsel at Bank of America. It is said he was ousted during the Merrill Lynch acquisition.
- April 2009 – current: Chief Administration Officer, Executive Vice President, General Counsel, and Secretary of Fannie Mae.
- Currently the co-chair of the Appleseed Foundation which is a non-partisan organization that offers pro bono legal services and fights for reform.