Freddie Mac wants more money, chief quits
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Freddie Mac CEO David Moffett has declared he is to quit his job by March 13. Meanwhile the embattled US mortgage giant has confirmed that it needs an additional $30 to $35 billion from the Treasury to prevent its collapse.
AFP - The embattled US mortgage finance giant Freddie Mac, put under government control in September to avoid collapse, said Monday its chief executive will step down this month.
Freddie Mac chief executive David Moffett notified the chairman of the board of directors that he was resigning both as CEO and as a member of the board effective no later than March 13, the company said in a statement.
"Moffett indicated that he wants to return to a role in the financial services sector," the company, formally known as the Federal Home Loan Mortgage Corporation, said.
Freddie Mac said the board was working with the Federal Housing Finance Agency (FHFA), which has control of the firm, to appoint a successor.
The company confirmed its announcement last month that it would seek an additional 30 to 35 billion dollars from the Treasury to prevent its collapse.
Freddie Mac, which along with its sister institution Fannie Mae was taken over by the government in a September rescue, had said at the time that it determined the size of the shortfall while preparing fourth-quarter and full-year 2008 results.
The funds would come from a 200-billion-dollar line of credit with the Treasury set up to keep the company at least with positive net worth. The Treasury doubled the lines of credit to Freddie and Fannie, to 200 billion dollars each, on February 18.
Freddie Mac has already received 13.8 billion dollars from the Treasury after reporting a third-quarter loss of 25.3 billion dollars amid the global financial crisis and housing slump.
It had lost 28.9 billion dollars in the second quarter.
Freddie and Fannie, both government-chartered but shareholder-owned companies designed to provide liquidity to the housing market, were placed under government control in early September in an effort to avert a meltdown in the financial system and offer a backstop for trillions of dollars in outstanding mortgage debt.
Under the plan, the two firms received government-appointed chief executives and shed their shareholder profit mission.
The companies have been working with the government and the private sector to try to stem the rise in foreclosures following the collapse of the housing market in 2006 and the related subprime mortgage implosion that triggered the financial crisis in August 2007.