Freddie Mac's Layton Plans to Step Down From U.S. Mortgage Giant
(Bloomberg) -- Freddie Mac Chief Executive Officer Donald Layton plans to retire next year, potentially creating vacancies atop both U.S. mortgage-finance giants that have been under government control since the 2008 financial crisis.
Freddie’s board is considering both internal and external successors to Layton, 68, the company said in a statement Wednesday. Executive Vice President David Brickman has been identified internally as a possible replacement, and directors have formed a search committee as part of an effort to review outside candidates, the company said.
Layton joins Fannie Mae CEO Timothy Mayopoulos in announcing plans to step down. The Treasury Department and the companies’ regulator, the Federal Housing Finance Agency, have been preparing for Layton’s resignation, Bloomberg reported earlier Wednesday. The departures could strengthen the Trump administration’s hand in shaping housing-finance policy.
Layton, 68, has led McLean, Virginia-based Freddie since 2012, a period during which the company returned to profitability after having been bailed out by the government at the height of the crisis. Regulators seized Freddie and larger rival Fannie in 2008 eventually injecting them with $187.5 billion to keep them afloat.
Layton plans to leave in the second-half of 2019. In the meantime, Brickman will serve as president and Deborah Jenkins, currently a senior vice president of multifamily underwriting and credit, will be promoted to executive vice president, according to the statement.
Fannie and Freddie don’t issue mortgages. Instead, they buy loans from lenders, wrap them into securities and make guarantees to investors in the bonds in case borrowers default. That process is crucial to the housing market because it frees up cash for lenders to underwrite more mortgages.
A potential hurdle to finding executives to replace Layton and Mayopoulos is that Congress in 2015 capped pay for the CEOs of Fannie and Freddie at $600,000 a year. Lawmakers did so after FHFA, which oversees the two companies, approved raises that could have increased compensation to about $4 million annually.
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