5 questions for Freddie Mac’s next CEO
WASHINGTON — Freddie Mac made it official on Thursday that David Brickman, a 20-year veteran with the mortgage giant, will become CEO effective July 1.
Brickman's appointment was widely expected since September, when the company announced it had promoted him to president and named him as the internal candidate to succeed retiring CEO Donald Layton.
Brickman, who joined Freddie Mac in 1999, oversaw the multifamily unit and a surge of growth in the company's multifamily portfolio. The unit increased production by 400% from 2010 to 2018.
Brickman will take the lead of Freddie during a major transition in housing finance. Both Freddie and Fannie Mae are set to roll out a uniform mortgage-backed security in June. Mark Calabria is awaiting Senate confirmation as the new director of the Federal Housing Finance Agency, which regulates the two government-sponsored enterprises. Fannie is also operating under new leadership, with Hugh Frater acting as interim CEO after Timothy Mayopoulos’ departure in October.
"I think it’s a very exciting time in terms of housing finance broadly. There is a lot of change. I think that change creates opportunity," Brickman said.
“It is very much an exciting time here at Freddie Mac and an exciting time in terms of the housing finance system in Washington,” he said. “I think that good things are likely to come from it.”
American Banker asked Brickman five questions about his plans as CEO and what he sees in Freddie Mac’s future.
This interview has been condensed and edited for clarity.
What does the transition period look like for you?
DAVID BRICKMAN: From now until July 1, Don and I will work closely together to ensure as close to a seamless transition as possible. I was announced six months ago as president, and Don and I have been working closely together, and so I have assumed greater responsibilities around the company, and will just be continuing that process up until that July 1 date.
What will be your top priorities as CEO?
Primarily to continue the great work that we have been doing and that Don has put in place. I think we’ve got the right strategy for the future, focused broadly on really three things. On continuing to drive innovation in the market, we’ve come a long way. We’ve introduced a lot of new capabilities to both the single-family and multifamily mortgage markets.
I think there’s still a lot of room to help modernize the market. I think a continued focus on our customers, being laser-focused on what they need, what will help them be successful and what will help them position themselves for the mortgage market of the future.
And then lastly, a continued strong focus on doing whatever we can to support affordable housing, and in particular, trying to put together that innovation I spoke of a moment ago, with the growing needs in affordable housing and greater challenges of affordability and seeing if there are greater ways we can really try to make a difference there.
Will your experience in the multifamily business help inform how Freddie looks for ways to support affordability?
I think it’s going to be very instructive in that certainly multifamily is close to affordability. That was very much on our minds every day in our DNA in terms of how we run that business. I do bring that perspective with me into the new role, along with a recognition that we have a significant supply problem in terms of affordable housing in this country, and that is something that shows up acutely in the multifamily and rental housing space.
I’ve been spending a lot more time with the single-family folks and see that we’ve got a similar issue going on that we don’t have an adequate supply of starter homes, of low- and moderate-income houses that have traditionally served as the first step for families looking to enter homeownership.
What is your vision for the company at the end of your tenure as CEO?
I think we are largely transformed as a company. I think Don gets tremendous credit for having put in place some of these structural changes in the organization. … I think that the mortgage market has probably lagged behind the rest of the financial services industry, and certainly you can say the economy broadly in terms of the adoption of new technology and the prospect of transformation in terms of the digital world and I think that's seen most readily in the costs, complexity and time, honestly, of getting a mortgage, of getting financing, and so that’s something that I’d really like to be able to change, to drive down that cost, to make mortgage financing more accessible, and doing that can lower costs for homeowners and ultimately even multifamily borrowers.
The second part of that I touched on already was I think challenges are growing in terms of affordable housing and would like to see if we can’t be more of the solution in terms of the housing supply issue. I don’t think traditionally that’s how we’ve seen ourselves and I think that’s a role I look to and hope to have a greater impact on is how can we contribute in some way to improving the supply of affordable housing around the country and helping to provide a greater supply of safe, decent affordable housing for all American families.
The third really goes back to the credit risk transfer, and I’ll say more broadly, lowering the cost of mortgage financing, lowering our cost of capital and doing it in a way that really ensures that we, Freddie Mac, at the center of the housing finance system, are as much as we can be, immunized from some of the economic shocks related to the economic cycle, to the credit cycle, such that we really are able to provide liquidity and stability in all market environments.”
You’ll be taking the helm of Freddie Mac at a transformational time, with GSE reform talks heating up and a new director of the FHFA. How will that factor into your role as CEO?
I think it’s a very exciting time at Freddie Mac. I think it’s a very exciting time in terms of housing finance broadly. There is a lot of change. I think that change creates opportunity.
I very much look forward to working with the acting Director [Joseph] Otting at FHFA and the new director, pending his confirmation, and developing strong relationships with FHFA and certainly even with Treasury and the other stakeholders involved in housing finance.
I think we really do have an opportunity to help continue this transformation not only at Freddie Mac, but in terms of the system at large. We are not here to set policy or determine policy, but we are here to execute it and help inform policy, and I really look forward to that ability to help illuminate policymakers in terms of what we can do as well as to be able to help steer us to that ultimate destination in terms of what we think the final system should look like.