Freddie Mac in search of CEO, $35 billion

Freddie Mac is looking for a new chief executive officer, and an additional $30 billion to $35 billion in government purchases of the company's preferred stock.

David Moffett, the former U.S. Bancorp executive who was named to lead the company in September after it was placed in government conservatorship, is resigning the job to "return to a role in the financial services sector."

The company's board of directors is working with the Federal Housing Finance Agency (FHFA) to appoint a successor to Moffett, and will name an interim CEO by March 13 -- the latest date Moffett has set for his departure, Freddie Mac said.

A Freddie Mac spokesman said Moffett was not asked to resign by FHFA or the Obama administration. The company's board will lead the process of selecting a new CEO, he said, working closely with FHFA and with final selection subject to approval by its regulator.

Freddie Mac said it also expects FHFA will ask the Treasury Department to purchase an additional $30 billion to $35 billion in company preferred stock, under an agreement that allows the government to invest a total of $400 billion in Freddie and sister company Fannie Mae.

The investments are a backstop against losses that allow Fannie and Freddie to continue purchasing and guaranteeing mortgages. So far, the government has purchased $13.8 billion in Freddie Mac preferred shares, and plans to invest $15.2 billion in Fannie Mae to help the company cover a recently declared $25.2 billion fourth-quarter loss.

Freddie Mac says it expects FHFA will request an additional $30 billion to $35 billion in government investment after the company files its annual report, which would bring the government's total investment in the two companies to date to about $64 billion.

Although Fannie and Freddie have tapped only a fraction of the capital available to them, the Obama administration last month upped the government's commitment to the companies from $100 billion each to $200 billion, or $400 billion total.

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