Freddie Mac has named veteran banker Ross J. Kari as its permanent chief financial officer, making him the latest member to join the GSE's new senior executive leadership team under recently appointed CEO Charles E. Haldeman. His appointment is effective Oct. 12.
Kari comes to the GSE from Fifth Third Bancorp, Cincinnati, the nation's 16th largest residential funder of home loans, according to the Quarterly Data Report.
During his career, he also has held management positions at the Federal Home Loan Bank of San Francisco, and Wells Fargo & Co.
Last month, Freddie Mac named mortgage industry veteran Bruce Witherell its chief operating officer. When he was appointed in July,
Haldeman expressed his eagerness to build an experienced management team at Freddie.
Kari assumes his new position at Freddie Mac at a time when GSEs have been experiencing unprecedented difficulty.
In other GSE news, for instance, National Mortgage News reported that combined, Fannie Mae and Freddie Mac are approaching a combined total of 100,000 in real estate-owned assets.
Fannie is at 63,000 while Freddie is at 35,000, according to former director of FHFA James B. Lockhart III.
As a featured speaker at The Five Star Default Servicing Conference and Expo in Fort Worth, Lockhart said while Home Affordable Modification Program (HAMP) and Home Affordable Refinance Program (HARP) are getting borrowers into safer mortgages, everyone is waiting to see if the modifications take or if they will re-default quickly. Their history has not been good, he said. Based on first quarter 2008 data, Fannie and Freddie only lowered payments for 3%.
"If you aren't lowering payments, it's not surprising you are not getting good results." He did say there was a more dramatic change in the second quarter, which will hopefully help more people stay current. Fannie and Freddie have lowered interest rates from 6.5% to 5%. Unfortunately, economic trends and growing unemployment could still hurt the market.
Looking at the future of Fannie and Freddie, with 5.5 trillion of mortgage exposure, he said the industry has to decide what it wants the secondary market to look like.
"Up a until a year and a half ago, it was a successful secondary mortgage market,"Lockhart said. "We allowed them to leverage themselves too much. They gave people cheaper mortgages than they should have had and now taxpayers are paying for it."
As to whether there will be a private label market comeback, he said it will take some time for that to happen, adding that it is important to divide the private from the public sector.
"If you don't draw the lines clearly you have what we had," Lockhart said. "We had the private sector taking profits and then the public picking up the losses. That was the big problem. We need a better understanding of what the private-public sector should be."