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Fannie Mae's Leader is a Brokerage Veteran

Hugh Frater, Former CEO at Berkadia, Takes Over as Interim CEO at Fannie
October 9, 2018
Hugh Frater, interim CEO of Fannie Mae.

Government-backed mortgage giant Fannie Mae tapped a veteran real estate investor and brokerage executive to lead the government-sponsored enterprise -- at least for now.

Fannie said Hugh Frater, former CEO of Berkadia, is taking over this week as interim CEO of the largest provider of liquidity to the U.S. housing market. Current CEO Timothy Mayopoulos said in July he would be leaving by the end of the year. A search for a permanent replacement has been going on for months, but he now plans to leave on Oct. 15. Mayopoulos, a lawyer by trade, has led Fannie Mae since 2012.

Frater is no stranger to Fannie Mae. He has served on its board of directors since 2016. He may be best known in real estate circles for his tenure between 2010 and 2014 as CEO of brokerage Berkadia. He was then chairman of that brokerage and advisory services firm from 2014 to 2015. He also worked at PNC Financial Services and was a founding partner at investment manager BlackRock.

Frater currently serves as the non-executive chairman of retail owner and operator VEREIT, the Phoenix-based real estate operating company.

It’s unclear whether the Fannie board will consider keeping Frater on as a permanent head. But the leadership change comes as the future of Fannie and sister entity Freddie Mac are again up in the air. The two have been under government conservatorship since 2008, when the housing market collapsed, but both have now stabilized and are profitable.

Best known as government-sponsored enterprises that guarantee single-family home mortgages, the two GSE's are also big players in the apartment investment market. Between the two they back about half the multifamily loans written in any given year.

Still, there is some question as to whether the Trump Administration will move to privatize them again when the president names a new head of their overseer, the Federal Housing Finance Agency. Current FHFA director Mel Watt’s term ends in January.

Freddie, too, is searching for new leadership right now. Current CEO Donald Layton announced he’d be stepping down next year after six years at the helm.

Fannie Mae Chairman Egbert L.J. Perry Jr. said Frater’s experience will benefit the organization that buys mortgages from lenders and often packages them into mortgage-backed securities. Fannie Mae works with multifamily developers to create new housing opportunities by helping them finance new properties.

"Hugh has a deep understanding of the housing and the financial services industries, and his experience on our board makes him an ideal choice to lead Fannie Mae as the interim CEO,” said Perry in a statement he issued. His daytime job is serving as chairman and CEO of Atlanta-based development firm Integral.

John Doherty, Multifamily Reporter  CoStar Group   
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