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Log inFreddie CEO Feels Strain Of Firm's Twin Missions
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Freddie CEO Feels Strain Of Firm's Twin Missions
by Outspoken on Wed Aug 06, 2008 8:35 pm
Freddie CEO Feels Strain Of Firm's Twin Missions
By Jeffrey H. Birnbaum and David S. Hilzenrath
Washington Post Staff Writers
Freddie Mac chief executive Richard F. Syron, who has presided over an implosion of investor confidence in his company, said yesterday that conflicting demands on the government-chartered mortgage giant have made his job "almost impossible."
On the eve of Freddie Mac's quarterly earnings report, Syron said that the McLean company has been whipsawed by the dual tasks of creating profit for private investors and serving the public by boosting the housing market.
"What this organization is all about is balancing among the different missions," Syron said in an interview. "It makes the job almost impossible."
Syron offered a spirited defense of his investment decisions at Freddie Mac, a company he's headed since 2003. He said he agreed to increase the purchasing of risky mortgages earlier this decade to fulfill his company's mandate to improve the housing market. But he did so, he said, in a way that also addressed his shareholders' desire to continue to make money.
"We thought that was the right judgment to make, given the information we had at that point in time," he said. Criticism of his choices "is just a little irritating," he added. "This is what we were required to do."
He also said he exercised restraint in buying relatively few subprime mortgages, the type of investment that helped lead to the crisis facing the financial markets. "We decided to give up market share rather than to chase it," he said.
Freddie Mac executives have said the company made a conscious decision to loosen lending standards during the housing boom to hold on to market share. Anthony S. "Buddy" Piszel, the chief financial officer, said in a December interview that the company's view was: "When the entire marketplace is seeing things one way, we can't unilaterally say we're going to see things another way."
Company spokeswoman Sharon McHale said yesterday that while the company moved in the direction of the market, it didn't go as far as others.
http://www.washingtonpost.com/wp-dyn/content/article/2008/08/05/AR2008080503351.html?wpisrc=newsletter
By Jeffrey H. Birnbaum and David S. Hilzenrath
Washington Post Staff Writers
Freddie Mac chief executive Richard F. Syron, who has presided over an implosion of investor confidence in his company, said yesterday that conflicting demands on the government-chartered mortgage giant have made his job "almost impossible."
On the eve of Freddie Mac's quarterly earnings report, Syron said that the McLean company has been whipsawed by the dual tasks of creating profit for private investors and serving the public by boosting the housing market.
"What this organization is all about is balancing among the different missions," Syron said in an interview. "It makes the job almost impossible."
Syron offered a spirited defense of his investment decisions at Freddie Mac, a company he's headed since 2003. He said he agreed to increase the purchasing of risky mortgages earlier this decade to fulfill his company's mandate to improve the housing market. But he did so, he said, in a way that also addressed his shareholders' desire to continue to make money.
"We thought that was the right judgment to make, given the information we had at that point in time," he said. Criticism of his choices "is just a little irritating," he added. "This is what we were required to do."
He also said he exercised restraint in buying relatively few subprime mortgages, the type of investment that helped lead to the crisis facing the financial markets. "We decided to give up market share rather than to chase it," he said.
Freddie Mac executives have said the company made a conscious decision to loosen lending standards during the housing boom to hold on to market share. Anthony S. "Buddy" Piszel, the chief financial officer, said in a December interview that the company's view was: "When the entire marketplace is seeing things one way, we can't unilaterally say we're going to see things another way."
Company spokeswoman Sharon McHale said yesterday that while the company moved in the direction of the market, it didn't go as far as others.
http://www.washingtonpost.com/wp-dyn/content/article/2008/08/05/AR2008080503351.html?wpisrc=newsletter
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Plato (427-347 BC)
