Fortress Investment Group, which controls a mid-sized subprime servicing operation, has hired former Fannie Mae chief Daniel Mudd to be its new chief executive.

Mr. Mudd was forced out of the money-losing Fannie Mae in September when the company and its sister firm, Freddie Mac, were placed into separate conservatorships. Mr. Mudd became CEO of the GSE in 2004 in the wake of a $6 billion accounting scandal where the firm's former management understated its prior years earnings.

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