ATLANTA — David Brickman, senior vice president of Freddie Mac Multifamily, has some advice for business leaders. “If anyone comes along and gives you the option to put your company into conservatorship, don’t do it,” Brickman jokes.
Brickman and Jeffrey Hayward, senior vice president of Fannie Mae’s National Servicing Organization, spoke Tuesday about their optimism and frustrations of working for Fannie and Freddie. Their comments came during a panel discussion focusing on agency lending at the Mortgage Bankers Association’s annual commercial/multifamily finance conference.
Fannie and Freddie’s assets and operations have been under the control of the Federal Housing Financing Agency (FHFA) since 2008. The FHFA has put constraints on the agencies and is in control of the agencies’ operations for the foreseeable future.
“There’s a significant layer of control put on us, and we simply can’t control our own destiny,” said Brickman. “It’s hard to provide great strategic direction when you can’t control (your future).”
Despite the distractions, the agencies’ multifamily divisions posted exceptional years in 2011 from a production standpoint. Fannie Mae recorded approximately $24 billion of multifamily mortgage volume in 2011, a 46 percent jump from 2010, while Freddie Mac’s production tallied about $20.3 billion, a 32 percent increase from 2010.
Brickman and Hayward spoke highly of their employees in terms of their performance and character while working under the constraints of the federal government. Brickman is worried about retaining his employees in this uncertain time.
“Our people want to know what their futures hold and that they’re going to be paid, and we can’t provide that assurance.”
There is a perception among some industry outsiders that Fannie and Freddie’s employees should be paid differently than other professionals in the field. Hayward disputes this notion.
“I don’t see where our customers are challenged on how they pay their people, and yet our people are being challenged,” said Hayward. “Anybody who aspires to think that they can run a company with a $5 trillion balance sheet, or $200 billion multifamily (division) with people of lesser quality is preposterous.”
The panel convened at a time of great uncertainty surrounding the future of the two agencies. In the past 5 months, the CEO of Freddie Mac, Charles Haldeman, and Fannie Mae, Michael Williams, have stepped down from their posts.
Furthermore, there is legislation in Congress that has been proposed by Sen. Bob Corker (R-Tenn.) and Sen. Johnny Isakson (R-Ga.). The bills propose to effectively unwind the two agencies in a 10-year span.
The panel’s moderator, Michael Berman, president and CEO of CW Capital, reiterated that legislation will likely not be passed this year but would instead frame the debate for the coming years when action will likely occur.
Other panelists included David Roberts, president and CEO of Grandbridge Real Estate Capital, and Steven Wendel, managing director of Deutsche Bank Berkshire Mortgage. Wendel took the opportunity at the panel to highlight the new logo for Deutsche Bank Berkshire once it takes its new name, Berkeley Point Capital.
Brickman projects Freddie’s multifamily volume to range from $20 billion to $24 billion in 2012 with less market share, while Hayward expects Fannie’s market share to remain the same. Brickman also said that Freddie has invested some money back into the company’s infrastructure and platform, even though the agency is in conservatorship.
While their fates rest with Congress, the agencies are both searching for CEOs. Brickman kiddingly issued an open invitation to apply for Freddie Mac’s CEO post.
“It pays at least a dollar and has all the opportunity to be indicted by Congress.”
— John Nelson