Fannie Mae sees more exits in leadership at an important moment for the mortgage giant

  • Two more senior leaders are leaving Fannie Mae, the latest in a string of other exits.
  • Efforts by the Trump administration to get Fannie Mae and Freddie Mac out of government control fizzled.
  • Exiting government control would potentially mean a payoff in the billions for high-profile investors.
  • The Biden administration is unlikely to prioritize the companies' return to private shareholders.
  • Visit Business Insider's homepage for more stories.

Two more senior leaders are leaving Fannie Mae, marking the latest shift in leadership at the mortgage giant whose future now lies with an administration unlikely to immediately prioritize a possible path out of government control.

The status of the company and its counterpart Freddie Mac, which together are cornerstones of US housing and guarantee roughly half of the $11 trillion US mortgage market, has been something of a political football for more than decade, since the government took them over after nearing collapse during the 2007-2009 global financial crisis.

Head of corporate strategy and vice president Fernando Correa Arango has left the firm and Desmond Smith, senior vice president and chief customer officer for the large single-family business line, is set to exit, according to people familiar with the plans.

They are the latest in a wave of senior leaders who are set to leave or have left Washington, DC-headquartered Fannie Mae in recent months. Arango, Smith, and representatives for Fannie Mae did not return requests for comment.

Arango was with the organization since June 2019, and was previously with Navigant Consulting, according to LinkedIn. Smith has been with Fannie Mae since 2016, and previously held roles at Capital One, Citi, and JPMorgan, according to LinkedIn. 

Smith has been overseeing a newly reorganized group of teams within Fannie Mae's single-family business line, which is its largest segment that sits alongside multi-family.

Customer strategic insights, community lending and engagement, customer care and solutions, and single-family business solutions have been reporting into Smith, Insider reported in October. 

Read more: Mortgage giant Fannie Mae is shaking up leadership in its largest business, with 2 top execs leaving

At least six senior leaders, including Smith and Arango, have now left or plan to leave Fannie Mae.

Andrew Bon Salle, who was with the firm for nearly three decades and rose to head the single-family housing business as one of the most senior leaders at Fannie Mae, left at the end of 2020, Insider previously reported. Jeffrey Walker, who was chief strategy officer of that business, left in October.

Henry Cason, the former head of digital products for single-family housing, left at the end of 2020 and Renee Schultz, who was the division's head of capital markets, is set to leave in the second quarter. Both were with the firm for more than two decades, according to a spokesperson who in November confirmed those exits. 

Read more: Mortgage giant Fannie Mae, which has been trying to plot a way out of government conservatorship, just saw another round of top leader exits

The exits come at a crucial moment for Fannie Mae, officially called the Federal National Mortgage Association, and its counterpart Freddie Mac, or the Federal Home Loan Mortgage Corporation.

Former President Donald Trump's administration had sought to find a viable way to take the two organizations out of government control. Trump had appointed Mark Calabria, the former chief economist for Vice President Mike Pence, to run Fannie and Freddie's regulator, the Federal Housing Finance Agency (FHFA). His term is set to end in 2024. 

But they remain in conservatorship, a state of play that bodes poorly for the big investors who have billions of dollars riding on their return to private hands. 

"Initially, we think the Biden administration will put this on hold," said Bose George, an analyst with Keefe, Bruyette & Woods, referring to the fate of Fannie and Freddie as the new team decides its priorities. 

The Wall Street Journal reported in mid-January, citing advisors close to then-President-elect Biden, that he would be in "no hurry" to privatize the two government sponsored-enterprises. Biden will instead likely focus on using the GSEs to boost housing affordability and homeownership, the WSJ reported. 

Shareholders also await a decision from the US Supreme Court around the FHFA's structure, which could in turn decide Calabria's control of the agency he leads. In early December, justices considered a financial crisis-era case where Fannie and Freddie shareholders argued that the single director of the FHFA can wield too much power.

Read more: Fannie Mae is asking key employees to be prepared to work through the holidays as the mortgage giant plots a potential 11th-hour release from government control

In December, Insider reported that Fannie Mae had alerted some strategy-focused employees to prepare for work over the winter holidays as the company appeared to try and plan an exit from government control.

That overall plan appeared unlikely, as former Treasury Secretary Steve Mnuchin suggested in an interview with the Wall Street Journal in December. 

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