The housing market will continue unscathed despite the departure of the chief executive officer and chief financial officer of Fannie Mae, the country’s largest mortgage finance company, industry figures opined.

“Personally, I don’t think any one person could have that much influence. I agree with David Lereah (senior vice president of the National Association of Realtors), who says we are still in a housing boom for the next five years nationally,” said Michael Godfrey, president of the Bay East Association of Realtors in Pleasanton, Calif. “I don’t think Raines’ resignation will affect the big picture too much.”

Godfrey was not alone in his views.

“It’s going to have a minimal effect. The main point is there’s a vibrant mortgage market outside of Fannie Mae and we expect that to continue,” said Jay Brinkmann, vice president of research and economics for the Mortgage Bankers Association.

Fannie Mae’s CEO, Franklin Raines, took early retirement, and its chief financial officer, Timothy Howard, resigned Dec. 21. The two left in the wake of a Securities and Exchange Commission directive to make accounting corrections that could knock out some $9 billion of Fannie Mae’s past profit.

“Whether or not Fannie Mae would have to shrink its portfolio was a concern. But Fannie Mae announced a $5 billion preferred capital offering and hence they don’t need to make any sales out of portfolio,” Brinkmann said. He was referring to the corporation’s Wednesday announcement that it will sell $5 billion in two placements of non-cumulative preferred stock to qualified institutional buyers.

“There won’t be any upheavals in the mortgage market,” Brinkmann said. “I don’t know what the impact is on Fannie Mae, but there’s no impact on mortgage rates and market share.”

Fannie Mae was established by Congress to keep mortgage funds for the nation’s housing market flowing steadily. The corporation securitizes and either resells or owns a hefty portion of the country’s outstanding mortgage debt, along with its relative Freddie Mac.

In September, Fannie Mae’s federal regulator, the Office of Federal Housing Enterprise Oversight, released a 211-page report alleging that the company used improper accounting techniques. Since then, the corporation has undergone a Justice Department investigation, a civil investigation by the SEC, shareholder lawsuits and a congressional hearing.

“Definitely confidence in Fannie Mae is shaken, and the same with Freddie Mac, the other large conduit for government guarantees of loans,” said Mitchell Grashin, a California loan broker who went to high school with Raines. The two are still friends.

“I don’t think Frank’s departure in itself will affect housing,” Grashin said. “Fannie Mae doesn’t deal directly with the public. It’s not going to interrupt Fannie Mae’s business flow, either. Fannie Mae deals in trillions of dollars and the accounting was under $10 billion of accounting difference.”

Despite Fannie’s woes, Rich Dibona, a California real estate agent, said the corporation is doing a good job.

“Overall they’re doing well at servicing the housing industry. This is a short-term bump in the road relative to the total effort it (Fannie) makes for the public,” said Dibona.

Fannie Mae and Freddie Mac will likely face more extensive reform proposals with the re-election of President Bush. Such changes also would be more likely to pass in the current political environment.

Regardless of whether Congress increases government oversight, some say the resignations and ongoing investigations could ultimately lead to a better managed company overall. The management shakeup could encourage Raines’ successor to increase internal oversight to reassure stockholders.

Fannie Mae’s stock continues to trade in the $70 range, closing Wednesday at $70.38. The stock jumped after the management shakeup was announced, from $70.35 to $72.10 the day after the announcement.

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