Fannie Mae CEO Michael Williams to Resign

Before you go, we thought you'd like these...
Before you go close icon


WASHINGTON -- The executive who was appointed to lead mortgage giant Fannie Mae in 2009 after the federal government seized the company plans to step down as its CEO.

Michael J. Williams announced Tuesday that he will continue as CEO and as a director until a successor is found.

"I decided the time is right to turn over the reins to a new leader," he said in a statement. Williams, 53, has been a Fannie employee since 1991.

The government rescued Fannie Mae and Freddie Mac in September 2008 after the two mortgage firms absorbed huge losses on risky loans that threatened to topple them.

Since then, a government regulator has controlled the two firms' financial decisions. Pressure has been building for the government to eliminate or transform the two companies and reduce taxpayers' exposure to further losses.

Questioned by Congress

So far, Fannie and Freddie have cost taxpayers more than $150 billion -- the largest bailout of the financial crisis. They could end up costing up to $259 billion, according to their government regulator, the Federal Housing Finance Administration, or FHFA.

Williams oversaw the restructuring of Fannie's foreclosure-prevention efforts and managed the troubled firm's reorganization and transition to conservatorship.

Freddie's CEO, Charles E. "Ed" Haldeman Jr., announced in October that he would resign within the next year.


The departures amount to the biggest leadership shake-up for the agencies since their takeover.

Williams, Haldeman and other Fannie and Freddie executives faced intense questioning on Capitol Hill in November over tens of millions of bonuses and compensation they received since 2009. Twelve executives at the firms received roughly $35.4 million in total salary and bonuses in 2009 and 2010. Williams earned about $9.3 million for the two years.

Members of Congress are seeking to end those bonuses and align salaries with other federal employees who earn much less.

In December, the Securities and Exchange Commission brought civil fraud charges against six former executives at the two firms, including former Fannie CEO Daniel Mudd and former Freddie CEO Richard Syron. The executives were accused of understating the volume of high-risk subprime mortgages Fannie and Freddie held just before the housing bubble burst.

No current Fannie or Freddie employees were charged or implicated.

Next: A New FHFA Director?

Williams' resignation might also intensify calls for the naming of a new director of FHFA. Edward DeMarco has served as the oversight agency's acting director since September 2009. But some lawmakers complain that DeMarco hasn't done enough to address rising foreclosures or to ease industry lending standards that critics call too restrictive.

The Obama administration nominated Joseph Smith, a North Carolina banking commissioner, to succeed DeMarco in November 2010. But Smith's confirmation was stalled by Senate Republicans, and he withdrew from consideration a year ago.

Washington-based Fannie and McLean, Va.-based Freddie buy loans from lenders, package them into bonds with a guarantee against default and sell those bonds to investors. Together, the companies own or guarantee about half of all U.S. home mortgages – about 31 million home loans – and nearly all new mortgages.

Fannie was created in 1938 in the aftermath of the Great Depression. It was privatized 30 years later to limit budget deficits during the Vietnam War.

In 1970, the government formed Freddie.

Copyright 2011 The Associated Press. The information contained in the AP news report may not be published, broadcast, rewritten or otherwise distributed without the prior written authority of The Associated Press. Active hyperlinks have been inserted by AOL.

22 PHOTOS
Best Cities to Buy Real Estate in 2012
See Gallery
Fannie Mae CEO Michael Williams to Resign

After bidding farewell to 2011, Realtors, investors and regulators the world over are no doubt wondering: Will 2012 be the year the real estate market finally rides out the aftershocks of the housing bust and mounts a full-on recovery?

There are indications that it could be. Big-time investors say that they're bullish on real estate and recent figures showing that pending home sales are at an 18-month high lend credence that view.

But even if home prices don't trend up nationwide, certain markets seem almost guaranteed to do well. Looking at a variety of sources, AOL Real Estate brings you 10 of this year's most promising housing markets for 2012. 

Location: Pittsburgh
Price: $299,900
Beds/Baths: 3/2
Sq. Ft.: N/A

MSN Real Estate lists Pittsburgh as one of the best housing markets in the U.S., pointing out that the steel town suffered practically no price decline following the housing bust and that its prices are projected to begin gaining ground relatively soon. 

This brick colonial typifies the sort of deal that you can expect to find on the higher end of Pittsburgh's market.  

See the listing for more details

Like many Northeastern homes, its interior has a bit of an Old World feel

See the listing for more details

Location: Worcester, Mass. 
Price: $300,000
Beds/Baths: 4/3
Sq Ft: 2,730

Tech companies are driving job growth in Worcester, according to MSN Real Estate. That may help real estate prices, which slipped 3 percent this past year, but are expected to tick up 2 percent in 2013. 

Spanning a generous 2,730 square feet, this alternatively colored home was built in 1987 and is equipped with its very own "game room," according to the listing. 

See the listing for more details

The home features hardwood floors and a well-equipped kitchen, with ample cabinetry. There's also a sliding glass door that leads to a porch overlooking the back yard.

See the listing for more details

Location: Kansas City, Kan. 
Price: $199,000
Beds/Baths: 4/3
Sq. Ft.: 2,123

Realtor magazine ranks Kansas City, Kan., as the most promising housing market of 2012. HousingPredictor, which the magazine used for its rankings, estimates that the Midwestern city will see its real estate prices appreciate by 5.8 percent in 2012. 

Priced at $94 a square foot, this four-bedroom delivers everything you need.

See more photos of the listing

Pictured here is the home's generously sized kitchen. 

See the listing for more details

Location: Topeka, Kan. 
Price: $429,000
Beds/Baths: 5/5
Sq. Ft.: 4,782

Kansas seems to have fared better than most through the real estate storm. Another one of the state's major cities, Topeka is predicted to post the second-highest increase in real estate prices, according to Realtor magazine.

Here is a sprawling home in Topeka, one of the ritzier houses in town. The $429,000 home offers five bedrooms and 4,782 total square feet. 

See the listing for more details

The home comes with a large living space bathed in sunlight through its giant windows. 

See the listing for more details

Location: El Paso, Texas
Price: $525,000
Beds/Baths: 5/4
Sq. Ft.: 3,767

El Paso is one of a host of Texas real estate markets that have fared well during the housing crisis. HousingPredictor projects a 3.2 percent increase in home prices this year. 

This groovy, fortress-like new traditional is priced at $525,000.

See the listing for more details


The interior has a slick modern feel. Texas chic, if you will. 

See the listing for more details

Location: Huntington, W.Va.
Price: $175,000
Beds/Baths: 4/3
Sq. Ft.: 1,804

On the hunt for new digs in a market that's turned the corner of the housing slump? Look no further than Huntington, W.Va. HousingPredictor expects the town's real estate prices to climb by 4 percent this year. 

Throw down $175,000 for this handsome 1/3-acre property, and enjoy a thoughtful interior as well as verdant surroundings. 

See more photos of this home

Sink your teeth into this kitchen.

Want tips on how to master real estate photography? Read some tips from a pro

Or see the listing for more details

Location: Charleston, W.Va. 
Price: $349,000
Beds/Baths: 4/3
Sq. Ft.: 3,716

Charleston clocks in at third on Realtor magazine's rankings of this year's most promising real estate markets. HousingPredictor expects a 4.5 percent increase. 

Search this town and you may find yourself mulling a neat property like this 3,716-square-foot four-bedroom. 

See more photos of this listing

The home offers elegant decor with dark hardwood floors and arched doorways. 

See the listing for more details

Location: Bismarck, N.D. 
Price: $493,500
Beds/Baths: 3/6
Sq. Ft.: 3,089

Bismarck, N.D., is also expected to perform well in the real estate market this year. HousingPredictor estimates a 3.6 percent increase in home prices there.

This home's exterior reminds us that along with some serious deals there's a tradeoff: You're going to have to cope with some very harsh winters. 

See the listing for more details

Don't expect to have to walk very far for a restroom in this home: Its bathroom-to-bedroom ratio is 2 to 1. 

See the listing for more details

Location: University Place, Wash. 
Price: $439,090
Beds/Baths: 3/2
Sq. Ft.: 2,058

A tip of the hat to DailyFinance for directing us to Tacoma, Wash., a city whose real estate prices are set to skyrocket, according to a Fiserv prediction. The financial services information provider projects that prices in Tacoma will jump a staggering 24.9 percent. 

Located in University Place, a suburb just outside of Tacoma, this listing offers a taste of the sort of homes that may benefit from the price boom. 

See the listing for more details

Constructed just a year ago, the home is practically brand new. Pictured here is the house's chicly lit kitchen. 

See the listing for details

Location: Memphis, Tenn. 
Price: $635,000
Beds/Baths: 5/6
Sq. Ft.: N/A

Fistserv also ranks Memphis, Tenn., as one of the most promising real estate markets of the year, predicting that the city's real estate prices will appreciate by 10 percent. 

This pricey home will bring you an acre of lush land, plus a down country five-bedroom that dates back to the 1950s. 

See the listing for details

The contemporary delivers a pool, some woodland and a colorful interior. 

See more photos of the listing

of
SEE ALL
BACK TO SLIDE
SHOW CAPTION +
HIDE CAPTION

Also see:
Bernanke: Fed Should Help Turn Foreclosures Into Rentals
Will FHA Be the Go-To Source for High-Cost Mortgages?
Read Full Story

Find a New Home

Buy
Rent
Value
Powered by Zillow

From Our Partners