When Fannie Mae chairman Franklin Raines testifies before a congressional panel on Wednesday,he will be fighting not just for his company but for his political and business reputation. Washington insiderswho know Mr. Raines say a lot is on the line. Not only was Mr. Raines a star in the Clinton administration(as OMB director he helped balance the budget), but he is/was up for a job in a Kerry administration,should there be one. It's anticipated that members of the House GSE Subcommittee will focus some of theirquestions on the $200 million in expenses deferred by Fannie back in 1998 so the firm could meet earnings-per-sharegoals (almost to the penny) that triggered $5.79 million in bonus money paid to its six top officers. Who got thebonus money? Answer: James Johnson, chairman and CEO ($1.9 million); Mr. Raines, chair/CEO designee ($1.1million); Larry Small, president ($1.1 million); Jamie Gorelick, vice chairman ($779,625); TimothyHoward, CFO ($493,750); and Rob Levin, EVP ($493,750). Mr. Johnson is a key advisor to Sen. John Kerry,D-Mass., and like Mr. Raines is supposedly up for a job in a would-be Kerry White House. Ms. Gorelick, who likeMr. Johnson, is no longer with the company, also has been mentioned as a possible Kerry appointee. Mr. Small, onthe other hand, is now the head of the Smithsonian. His management of that institution has been somewhatcontroversial. Earlier this year he copped a plea to being in possession of rare bird feathers...
Of all the Fannie Mae executives getting their names dragged through the mud in the scandal, the executive whosename appears the most in OFHEO's scathing 200-plus page report on the mess is CFO Howard. His name is mentionedabout 100 times in the report. But some industry executives who know Mr. Howard vouch for his reputation. Requestinganonymity, one former Fannie executive who worked with Mr. Howard had this to say: "Tim is honest and bright.There is not a bad bone in his body. It's easy to make second guesses about all of what's been going on"...
What does Fannie Mae have to do with Enron? Sometime around the last presidential election, Mr. Raineswas reportedly trying to get then Enron chairman Ken Lay to join Fannie's board. This was, of course, beforeEnron collapsed and the Justice Department got involved. Landing Mr. Lay would have been a real coup forFannie, that is, if Enron hadn't turned out to be cooking its books. Lay was a key fundraiser and friend of PresidentBush...
On to other industry news: want an update on what the future might hold for Cendant Mortgage? Read Monday'sedition of National Mortgage News. Don't subscribe to NMN? Call: (800) 221-1809...
Washington Mutual, which is trying to restructure its mortgage operations, has scheduled an Oct. 21 conferencecall to discuss its third-quarter earnings...
Smith Barney last week initiated coverage on Genworth Financial, rating it a "buy."Genworth owns the nation's fourth largest MI in terms of new policies written...
Not only are home prices shooting through the roof in certain real estate markets but, nationally, the costof building materials is skyrocketing as well. Case in point: according to a report in the Washington Post,framing lumber has risen almost 36% in one year...
CUNA Mutual Mortgage Corp. has inked a deal to buy a suite of technology products from HanoverTradeInc. The technology suite provides CMMC with a seamless process of accepting electronic loan file submissionsfrom credit unions via the Internet...
WASHINGTON NEWS: One of Fannie Mae's staunchest allies, the National Association of Home Builders,is re-evaluating its relationship with the government-sponsored enterprise as a result of the accounting problemsexposed by the Office of Federal Housing Enterprise Oversight. "I am shocked and appalled that thishas happened," NAHB chief executive Jerry Howard told MortgageWire this past week. NAHB's boardis meeting this weekend to discuss the matter further. NAHB has stopped all lobbying on behalf of the GSEs, includingefforts to get the Department of Housing and Urban Development to compromise on its proposal to raise theGSEs' affordable housing goals. (See Brian Collins' story in Monday's NMN.)
MORTGAGE PEOPLE: Genworth Financial has hired Kate Carey to head its government relations officein Washington. American Mortgage Network has named Dennis Horne vice president, regional managerof its East Bay regional center in Concord, Calif. Georgeann Gunn joins the company as regional operationsmanager.
MORTGAGE DATA/RESEARCH NOTICE: Want fresh, up-to-date stats on the subprime and prime market? Want alist of the top funders in the first-half, including all channel breakdowns? NMN's new "Mid-Year DataReport" is now ready. For more information contact Deartra Todd at (202) 434-0320 or email:
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