New Freddie chief faces home loan losses
"You could continue to have a profit-seeking enterprise"
Veteran money manager and corporate turnaround specialist Charles "Ed" Haldeman of Haverford came out of retirement last summer to head money-losing, government-controlled home-loan finance giant Freddie Mac.
Since then, the company's reported $12 billion in losses, bringing the three-year total to $75 billion, as it works its way through a long list of bad loans.
Treasury Secretary Timothy Geithner told Congress this week he's still seeking advice on a plan to reorganize Freddie and its larger twin, Fannie Mae.
Geithner lamented the way Fannie's and Freddie's "duty to maximize profits" for investors had conflicted with their "public mission" to make homes affordable. But that doesn't mean he's for ending their investor-owned, private-company status, Haldeman told me.
"You could continue to have a profit-seeking enterprise," with the government still guaranteeing mortgage-backed securities, in exchange for insurance fees, as it does with bank deposits.
What's it like running a government-controlled company? "It's a tough job," he said. "There are a lot of constituencies." He has to say No a lot. I'll write more on Haldeman's prognosis for the U.S. home market in Sunday's column.