WASHINGTON (AP) - The top executive of Freddie Mac is quitting after less than six months on the job as the company continues to hemorrhage from mortgage losses and plans to ask the government for up to $35 billion in additional aid.
Freddie Mac said Monday that David Moffett will step down as chief executive and leave the company's board of directors by March 13. Moffett, a former vice chairman of US Bancorp, has been CEO since September, when the government seized control of the mortgage finance company and its sibling Fannie Mae.
Together, Fannie and Freddie own or guarantee almost 31 million home loans worth about $5.5 trillion. That's more than half of all U.S home mortgages.
So far, the debt markets that Freddie Mac and Fannie Mae rely on to keep the U.S. mortgage market rolling have reacted calmly to the government's role. But investors could get nervous if the companies are unable to keep top managers.
"It's never a positive sign when you see someone leave after six months," said debt analyst Jim Vogel of FTN Financial in Memphis, Tenn.
Freddie Mac said its board is working with the Federal Housing Finance Agency to appoint a successor to Moffett, who indicated in his letter of resignation that he wanted to return to the financial services sector.
The company's board chairman, John Koskinen, said in a statement that the company expects to pick an interim top executive by Moffett's departure date, adding that "we are very sorry to see David go."
Sharon McHale, a spokeswoman for Freddie Mac, said the departure was Moffett's decision and "wasn't requested or suggested by FHFA or anybody in the administration" of President Barack Obama.
The announcement comes just days after Fannie Mae said it needs $15.2 billion in government assistance and that it lost nearly $59 billion last year as the foreclosure crisis mushroomed.
Fannie Mae also said that although its access to debt markets has improved under government control, it may need short-term loans from the Treasury Department, under an agreement that expires at the end of the year.
Freddie Mac, based in McLean, Va., is expected to report its fourth quarter earnings early this month, and has already tapped almost $14 billion in government aid. The Treasury Department last month doubled its lifeline for Fannie Mae and Freddie Mac to $200 billion each.
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