Freddie Mac CEO David Brickman’s resignation will take effect on Jan. 8 as the enterprise continues its battle to exit a decade-long conservatorship.

David Brickman is leaving his post as Freddie Mac’s CEO at the beginning of the year, according to the enterprise’s latest Securities and Exchange Commission filing on Friday morning.

First reported by HousingWire and ReutersFreddie Mac Investments and Capital Markets Executive Vice President Michael Hutchins will serve as interim president while the Board of Directors begins the hunt for a CEO. The filing said Hutchins won’t receive any additional compensation for his role as interim president.

David Brickman

The filing also listed Hutchins’ extensive career, which included management and executive positions at PrinceRidge, UBS, and Solomon Brothers before joining Freddie Mac in 2013. Inman reached out to Freddie Mac for additional comments about Brickman and Hutchins, but they were unavailable.

As noted in HousingWire’s report, Brickman’s departure comes at a fraught time for Freddie Mac and Fannie Mae. In Sept. 2019, the U.S. Department of the Treasury recommended the Federal Housing Finance Agency (FHA) end Freddie and Fannie’s government conservatorship after more than a decade.

Both enterprises have repaid the $187.5 billion bailout provided by taxpayers and have since become profitable. However, the movement toward exiting conservatorship has been slow as legislators battle over the best way forward and whether private mortgage lenders and banks should be able to enter the secondary market.

“In place of this arrangement will come new limited federal guarantees for mortgage-backed securities issued by Fannie and Freddie and any prospective private players that enter the secondary market alongside them, to be overseen by an unspecified ‘federal entity,'” a previous Inman article explained. 

“The White House wants to give other mortgage lenders and banks a chance to enter the secondary market, where Fannie Mae and Freddie Mac currently purchase mortgages directly from lenders, add to these mortgages a guarantee that the GSEs will pay up if homeowners default, repackage the mortgages into mortgage-backed securities and hold them or sell them to investors.”

All the while, Freddie Mac and Fannie Mae’s executives have been pointing to stellar quarterly and annual earnings calls as evidence both enterprises are more than ready to exit government conservatorship and stay on the right track.

“The company delivered strong earnings on higher revenues, substantially increasing our total equity by $2.5 billion to $13.9 billion – bringing us one step closer to our goal of responsibly exiting conservatorship,” Brickman said during Freddie Mac’s third-quarter earnings call where the enterprise reported a net income of $2.5 billion. “We did this while helping hundreds of thousands of families buy, rent and remain in their homes.”

“Our performance this year demonstrates our ability to support the mortgage market in a safe and sound manner even during these uniquely challenging times,” Fannie Mae CEO Hugh Frater added after noting Fannie’s $4.2 billion net income. “To continue meeting these challenges, we believe our company and the broader housing finance system would be best served by a responsible end to Fannie Mae’s conservatorship, consistent with FHFA’s goals.”

In October, the FHFA released a four-year gameplan toward ending conservatorship; however, politics and housing experts believe President-Elect Biden, who crossed the 290 electoral votes mark on Friday, will revert to Obama-era policies.

“The Trump administration has clearly indicated its intent to end the conservatorships administratively if they cannot reach a legislative solution,” FHFA former acting director and Housing Policy Council President Ed DeMarco told MarketWatch on Nov.9. “The Biden campaign has not addressed the issue but conventional wisdom is that a Biden administration is unlikely to pursue that route.”

“If Biden wins, they’re going to be a tool to help with racial justice and economic inequality once again,” Beacon Policy Advisors Brandon Barford said in the same article. “So I don’t think there’s any desire to have them be released under a Biden administration, or necessarily to have them hold higher capital, because that makes the pool they have to purchase mortgages smaller.”

Email Marian McPherson

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