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Fannie Mae names new officers in finance division

May 19, 2005

Mortgage financier moves forward with reorganization plan

Inman News

Moving forward with a reorganization plan in the wake of federal accounting investigations, Fannie Mae has added nine new officers to its finance division, the company announced Wednesday.

Eight of the new officers are in the Controller's Office, which is one of six areas in the company's finance division. The Controller's Office, led by senior vice president and controller David Hisey who joined Fannie Mae in January, includes four major functions: financial controls and systems, financial reporting, accounting operations, and valuation and price verification.

"This is the first phase of implementing a very significant reorganization, which the board has approved," said Fannie Mae board member H. Patrick Swygert. "Reorganizing and strengthening our finance area is a top priority as we progress through the review, re-audit and restatement process."

Swygert added, "We are addressing departmental roles and responsibilities, lines of reporting, segregation of duties, and independence and alignment of functions."

Swygert chairs the board's compliance committee, which was formed to monitor and coordinate compliance with the agreements reached between Fannie Mae's board of directors and the company's safety and soundness regulator, the Office of Federal Housing Enterprise Oversight on Sept. 27, 2004, and supplemented on March 7, 2005.

"As we make these changes, we are working very closely with OFHEO," said Fannie Mae Chairman Steve Ashley. "Adding new talent and implementing stronger financial controls are important steps in fulfilling the company's commitments."

Internal and external reviews and investigations of the mortgage giant are continuing in the wake of a 2004 Securities and Exchange Commission directive ordering Fannie to make accounting corrections that could knock out some $9 billion of past profit. Since then, additional irregularities have been discovered.

The new officers announced this week are:

• R. Scott Blackley, C.P.A., senior vice president – Accounting Policy;
• Mary B. Doyle, C.P.A., senior vice president – Financial Controls and Systems;
• Gregory H. Kozich, C.P.A., senior vice president – Accounting;
• Paul A. Noring, C.P.A., senior vice president – Finance;
• James Kelly Ardrey Jr., C.P.A., vice president for assets accounting;
• Patricia Black, vice president for Financial Controls;
• Nigel D. Brazier, vice president and Business Unit Controller;
• James W. Horne, C.M.T., vice president for Accounting Systems;
• Nicholas Radesca, C.P.A., vice president for Financial Reporting;

In December 2004, Fannie Mae replaced Franklin Raines, its chairman and CEO, who announced he was taking early retirement, and Fannie Mae's chief financial officer, Timothy Howard, resigned Dec. 21.

Fannie Mae's financial accounting troubles have drawn shareholder lawsuits and investigations by the Justice Department and the Securities and Exchange Commission.

Both Fannie Mae and fellow government-sponsored enterprise, Freddie Mac, face heavier regulation and calls for portfolio limits in the wake of the accounting irregularities uncovered late last year. House Financial Services Committee Chairman Michael G. Oxley, R-Ohio, has pledged to work toward a legislative reform for Fannie Mae. Oxley has said that it is necessary to build a stronger regulator for the GSE.