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Economic News

The long career path of Fannie Mae’s next CEO

As Fannie Mae continues to be government sponsored, the firm is under the microscope as they announce their new CEO who will be tasked with leading the firm out of years of financial ruin.

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New Fannie Mae CEO named

Fannie Mae announces new CEO

Fannie Mae has announced the appointment of Timothy Mayopoulos as the CEO of government backed firm, after the January announcement that after just two years as CEO, Michael Williams was stepping down for reasons not released.

The government-sponsored entity was put into conservatorship in 2008 to save it from failing, and posted losses of $5.1 billion in the third quarter of 2011 and requested $7.8 billion more in taxpayer support from the Treasury Department, the same month that they were criticized for wasteful spending and for awarding executives exorbitant bonuses despite struggling to perform without further governmental aide.

In December, the Securities and Exchange Commission charged six former Fannie Mae and Freddie Mac executives with civil fraud for misrepresenting their holdings of high-risk mortgage loans, although Williams has come out clean, former Fannie Mae CEO Daniel Mudd was charged. Additionally, two former CEOs of Fannie Mae, James A. Johnson and Franklin Raines were named as recipients of low-cost “Friends of Angelo” loans from Countrywide, a conflict of interest for the two.

Timothy Mayopoulos’ career path

“I am honored with this extraordinary opportunity to lead Fannie Mae during this critical period,” Mayopoulos said in a statement. “We have a responsibility to return value to taxpayers and to contribute our expertise and experience to building a more effective and stable housing finance system for the future.”

In May, Fannie announced it would not require additional bailout money as it had its best quarterly results since 2004. Mayopoulos will take a pay cut from his $2.9 million compensation from Fannie Mae in 2011 (including stock options) to a base salary of $600,000 as legislation recently reduced executive pay at the mortgage giant. He will still be due salary and incentives earned in this year that have been deferred, which will be paid next year.

Edward DeMarco, the head of the Federal Housing Finance Agency, which oversees Fannie and Freddie, said in a statement that Mayopoulos would lead efforts to “continue strengthening Fannie Mae and provide critical foreclosure prevention services as we build the foundation for the secondary mortgage market of the future.”

Mayopoulos has an interesting career that critics will see as marked with deep roots in the financial industry, while supporters will likely see as ambitious and filled with accomplishments. Mayopoulos’ professional timeline is featured below:

  • Graduated from Cornell University with a BA in English with distinction.
  • Earned his JD cum laude from New York School of Law where he also served as the Editor of the NYU Law Review.
  • October 1986 – September 1994: practiced at Davis Polk & Wardwell private law practice.
  • October 1994 – April 1996: served in the Office of Independent Counsel during the Whitewater scandal.
  • May 1996 – November 2000: Managing Director and Associate General Counsel at Donaldson, Lufkin and Jenrette.
  • November 2000 – May 2001: Managing Director and Senior Departmental General Counsel at Americas of Credit Suisse First Boston.
  • January 2002 – January 2004: Managing Director and General Counsel at Americas of Deutsche Bank.
  • January 2004 – December 2008: Executive Vice President, General Counsel at Bank of America. It is said he was ousted during the Merrill Lynch acquisition.
  • April 2009 – current: Chief Administration Officer, Executive Vice President, General Counsel, and Secretary of Fannie Mae.
  • Currently the co-chair of the Appleseed Foundation which is a non-partisan organization that offers pro bono legal services and fights for reform.

Tara Steele is the News Director at The American Genius, covering entrepreneur, real estate, technology news and everything in between. If you'd like to reach Tara with a question, comment, press release or hot news tip, simply click the link below.

Economic News

Is the real estate industry endorsing Carson’s nomination to HUD?

(BUSINESS NEWS) Ben Carson’s initial appointment to HUD was controversial given his lack of experience in housing, but what is the pulse now?

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NAR strongly backs Dr. Carson’s nomination

When President-Elect Donald Trump put forth Dr. Ben Carson’s name as the nominee for Secretary of Housing and Urban Development, NAR President William E. Brown said, “While we’ve made great strides in recent years, far more can be done to put the dream of homeownership in reach for more Americans.”

At the time of nomination, the National Association of Realtors (the largest trade organization in the nation) offered a positive tone regarding Dr. Carson and said the industry looks forward to working with him. But does that hold true today?

The confirmation hearings yesterday were far less controversial than one would expect, especially in light of how many initially reacted to his nomination. Given his lack of experience in housing, questions seemed to often center around protecting the LGBT community and veterans, both of which he pledged to support.

In fact, Dr. Carson said the Fair Housing Act is “one of the best pieces of legislation we’ve ever had in this country,” promising to issue a “world-class plan” for housing upon his confirmation…

>>>>>Click to continue reading…

#CarsonHUD

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Economic News

Job openings hit 14-year high, signaling economic improvement

The volume of job openings is improving, but not across all industries. The overall economy is improving, but not evenly across all career paths.

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Job openings hit a high point

To understand the overall business climate, the U.S. Labor Department studies employment, today releasing data specific to job vacancies. According to the department’s Job Openings and Labor Turnover Survey (JOLT) for April, job openings rose to 5.38 million, the highest seen since December 2000, and a significant jump from March’s 5.11 million vacancies. Although a lagging indicator, it shows strength in the labor market.

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The Labor Department reports that the number of hires in April fell to 5 million, which indicates a weak point in the strong report, and although the volume remains near recent highs, this indicates a talent gap and highlights the number of people who have left the labor market and given up on looking for a job.

Good news, bad news, depending on your profession

That said, another recent Department report notes that employers added 221,000 jobs in April and 280,000 in May, but the additions are not evenly spread across industries. Construction jobs rose in April, but dipped in professional and business services, hospitality, trade, and transportation utilities. In other words, white collar jobs are down, blue collar jobs are up, which is good or bad news depending on your profession.

Additionally, the volume of people quitting their jobs was 2.7 million in April compared to the seven-year high of 2.8 million in March. Economists follow this number as a metric for gauging employee confidence in finding their next job.

What’s next

If you’re in the market for a job, there are an increasing number of openings, so your chance of getting hired is improving, but there is a caveat – not all industries are enjoying improvement.

If you’re hiring talent, you’ll still get endless resumes, but there appears to be a growing talent gap for non-labor jobs, so you’re not alone in struggling to find the right candidate.

Economists suspect the jobs market will continue to improve as a whole, but this data does not pertain to every industry.

#JobOpenings

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Economic News

Gas prices are down, so are gas taxes about to go up?

Do low gas prices mean higher gas taxes are on the way? Budgeting for 2015 just got a bit more complicated, if some politicians have their way.

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Gas taxes and your bottom line

Many industries rely heavily on time in their vehicle, not just truck drivers and delivery trucks. Sales professionals hop in their vehicles throughout the day, as do many other types of professionals (service providers like plumbers, and so forth). For that reason, gas prices and taxes are a relevant line item that must be budgeted for 2015, but with politicians making the rounds to push for higher gas taxes, budgeting becomes more complicated.

Gas prices are down roughly 50 cents per gallon compared to a year ago, which some analysts say have contributed to more money in consumers’ pockets. Some believe that this will improve holiday sales, but others believe the timing is just right to increase federal taxes on gas. The current tax on gas is 18.40 cents per gallon, and on diesel are 24.40 cents per gallon.

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Supporters and opponents are polar opposites

Supporters argue as follows: gas prices are low, so it won’t hurt to increase federal gas taxes, in fact, those funds must go toward improving our infrastructure, which in the long run, saves Americans money because smoother roads mean better gas mileage and less congestion.

Gas taxes have long been a polarizing concept, and despite lowered gas prices, the controversial nature of the taxes have not diminished.

While some are pushing for complete abolition of federal gas taxes, others, like former Pennsylvania Governor, Ed Rendell (D) tell CNBC, “Say that cost the average driver $130 a year. They would get a return on that investment” in safer roads and increased quality of life, he added.

The Washington Post‘s Chris Mooney points out that federal gas taxes have been “stuck” at 18 cents for over 20 years, last raised when gas was barely a dollar a gallon and that the tax must increase not only to improve the infrastructure, but to “green” our behavior, and help our nation find tax reform compromise.

Is a gas tax politically plausible?

Mooney writes, “So, this is not an argument that a gas tax raise is politically plausible — any more than a economically efficient tax on carbon would be. It’s merely a suggestion that — ignoring politics — it might be a pretty good idea.”

Rendell noted, “The World Economic Forum, 10 years ago, rated us the best infrastructure in the world,” adding that we “need to do something for our infrastructure, not in a one or two year period, but over a decade.”

Others would note that this rating has not crumbled in just a few years, that despite many bridges and roads in need of repair, our infrastructure is still superior to even the most civilized nations.

Regardless of the reasons, most believe that Congress won’t touch this issue with a ten-foot pole, especially leading up to another Presidential campaign season starting next year.

“I think it’s too toxic and continues to be too toxic,” Steve LaTourette (the former Republican congressman best known for his close friendship with his fellow Ohioan, Speaker John Boehner) tells The Atlantic. “I see no political will to get this done.”

Whether the time is fortuitous or not, and regardless of the positive side effects, many point to a fear of voters’ retaliation against any politician siding with a gas hike, so this matter going any further than the proposal stage is unlikely.

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