Tuesday, September 2, 2014

More Mortgage Activity When Congress Soon Reconvenes

Selected Memories of 3900 Events & People


With news about possible sale of the building, here are a few Maloni recollections of actions at the Fannie Mae headquarters, 3900 Wisconsin Avenue, NW. 

Fannie definitely took advantage of its striking corporate headquarters physical plant. The Williamsburg red brick building, north of historic Georgetown and four blocks past the National Cathedral,  enjoyed a long half-moon Belgian stone driveway, manicured lawn and shrubbery, fountain, arched entry doorway, and the wonderfully utilitarian, employee-dubbed “Great Hall,” which served as venue for dozens of events, internal and external celebrations, advisory council meetings, charitable fundraisers, employee craft fairs, industry gatherings, congressional and Cabinet visits, speaking engagements, and the like. 

The room could be stylized any number of ways, with furniture that could be rolled away and collapsed increasing the usable space. Portraits of Chairmen and revered employees, like the late Dale Riordan, hung on the walls. (Riordan, who hired me from the Fed and for a time was my boss, at various times headed every business unit at Fannie because of his hard work and reliability.) 

The company’s attention to detail and top shelf entertainment were well known in DC and appreciated, although I am sure that some who partook over the years later were quick to join the haters when their jealousy overtook their reason.

Requests to work at Fannie were common and fell like heavy rain during time there. Very few of those asks were rewarded with job offers. 

In my 21 year Fannie career, I always worked in 3900. My first eight, for the Ivy League (Yale, Harvard Law) educated, always polite, gentlemanly and thoughtful Fannie Chairman and CEO David Maxwell, who was a college tennis captain and a lifelong tennis competitor.  

Almost 25 years after retiring from Fannie—when most folks sink into rocking chairs--Maxwell still displays those same qualities—and a killer serve--as he plays tennis doubles three times a week with skilled peers. 

Maxwell—who had/has an excellent blend of business and politics experience--was a former Pennsylvania state insurance commissioner, a GOP candidate for Congress, HUD General Counsel under Secretary George Romney (Mitt’s Dad) and later, head of California based TICOR mortgage insurance company.

Accompanied in most of his efforts by his wife and life partner Joan—who carved out her own DC careers working on urban social ills and then in the ministry—David is a literal man of letters, who reads  and consumes information voraciously (carting dozens of books on vacations) and the couple are world travelers. David still pens handwritten notes to friends and colleagues matching what he did when he ran Fannie Mae for nearly 10 years. 

Maxwell earned his financial spurs bringing Fannie Mae back from hard times in the early 1980’s—often battling industry and political opponents--and making it a business and earnings success before retiring near the end of the decade.  

David Maxwell never suffered fools gladly and earned the reputation of removing Fannie officials whose principles and productivity did not measure up to what Maxwell believed was needed to sustain and grow Fannie Mae, which he was determined never would revert to the financial basket case he found when he was hired. 

He felt the pressure to rebuild the mortgage giant and he inculcated in himself and his trusted others his aspirations for Fannie Mae’s institutional integrity, mission and financial success. 

Maxwell’s business achievements speak for themselves. But, he could get prickly. Once, he agreed to permit a certain very senior exec to experiment with the officer’s new design ideas for Fannie’s entrance way. 

Maxwell was unaware that work was completed one morning when he, with me in tow, returned from a Capitol Hill appointment. As we exited the car and walked through the front door, he stopped, just before walking under what I later described as a trashy art deco overhang version of the “Star Wars” barroom scene throbbing the company's name. 

In one terse utterance—and without missing a forward step—Maxwell growled to a small waiting assemblage, “Take that down.” Both the façade and the underling’s career soon were history. (One was kept in an obscure Fannie Mae storage facility until “lost” and the other took Horace Greeley’s advice and went west!) 

To read more about the Maxwell Fannie Mae achievements, read the “Good to Great” book by Jim Collins, the noted business author.


Jim Johnson & the Trillion $$$ Commitment


Two affordable housing matters stand out—for different reasons--one heavily planned with dozens of moving parts and the other very much serendipitous and unanticipated. 

No matter Fannie produced, lots of interests—advocates, shareholders, Congress, and Administrations--asked it constantly to do “more.” 

In 1994, Fannie CEO Jim Johnson, Maxwell’s successor, announced Fannie Mae’s “Trillion Dollar Commitment” to finance housing for an additional 10 million American families by the year 2000. 

The glitzy outdoor announcement in front of 3900 featured corporate officials, much media, non-profit sponsors, low income stakeholders, was lavish, by design, but more importantly set in stone a corporate initiative that drove several years of patient and exact work—in connection with the HUD housing goals—to grow the US homeownership rate and to serve hundreds of thousands of families that had been shut out. 

The numbers were always had a built-in “reach,” but Johnson was confident that Fannie and the primary market, we had to bring with us to do the actual lending, were up to it.

It was bold corporate choice, driven by Johnson’s vision, and by the time the initial flags and banners were gone Fannie employees totally bought into the memorable and lasting agenda. 

A new business unit with hundreds of employees was created to facilitate homebuyer education and work with lending partners and other in the related industries. Fannie opened nearly 50 Partnership Offices serving local and regional markets, with detailed and specific investment plans revisited annually to show progress. 

Fannie employed “housing fairs” across the nation to explain the rudiments of mortgage finance and what was needed to afford a mortgage became Fannie staples. The company produced Fannie educational brochures in 11 different languages (including two dialect of Chinese), a national home buyer education television campaign, and a partnership with the National Basketball Association and---separately--the same with several of its franchises. 

It was a thrilling ride barely capped when new Chairman and CEO Frank Raines announced in 1999 that Fannie had reached, a full year early, its Trillion Dollar and 10 Million families served goal.

Gail Cincotta 

In what turned out to be more amusing and totally spontaneous, but kind of the flip side of a similar coin, was an invasion of 3900 by several busloads of low income and elderly residents—also seeking more mortgage finance support--led by the indomitable Chicago affordable housing advocate, Gail Cincotta, head of what she called “National People’s Action, an amalgam of some 300 community groups.

Gail’s logistical targeting was off that day, since David Maxwell was away from the office when Gail’s vanguard arrived, but he wasn’t her primary target.

It was to be get into our corporate face and get additional media attention, both of which she did.  

This tactic became a Gale-staple and her folks often would come to Washington and show up in numbers at the homes or offices of Administration officials, Members of Congress, and anyone involved in mortgage finance with whom she had an issue. 

Later, it was rumored that Gail had told her posse that Fannie would provide them a free lunch, which encouraged many of these seniors to get out of their comfortable bus seats and mount our front steps. 

One memorable scene I watched was our dedicated front door security guard, a rather tallish woman, who in desperation just spread her long arms out from her shoulders to stop the rush of oldsters from entering her building without first registering and going through whatever we demanded of “visitors.” 

With the lady’s arms extended, she stood like a giant “T” trying to deny admission to the invaders. The Chicagoans ignored our sentinel and literally rolled or were pushed in under the guard’s wingspan filling the interior “Great Hall” looking for the promised food. 

I don’t think we provided a spontaneous lunch for a few hundred, although they were invited to our employee cafeteria, but Gale did get to make her views known to the Executive Vice President in charge of affordable housing. 

“Da,” The Russians Lie, Regularly
“Nyet,” They Seldom Tell the Truth


Why is it taking the world so long to publicly announce what we’ve written for years and that is that the Russian government and all of its spokespeople—including Vlad Putin— behave like a thieves nabbed in the act and then fabricate, lie, obfuscate, deny, badger, ignore, and pretend evidence of the same is bogus.  

I am sure many nations do the same but are any as blatant as the Russkies, a reflection of their huge national inferiority complex. 

“Don’t mess with us, we are a super power,” warns Vlad, but is there a little “whistling past the graveyard” in that statement.  

Russia has a currency under assault, a weak market, hardly market based and dozens of ethnic minorities who-- depending on the day of the week--aren’t sold on Moscow’s veracity or benevolence.
Putin, a thug among thugs, knows if he stops feeding his oligarchs and the Russian Mafioso’s he’s history. So with his “grander Russia” BS, he continues the aggrandizing. 

I hope our President also is applying his pre- and post-WWll to Putin and the ISIS threats in the Middle East. 

The US should jack up the sanctions, getting a quibbling Europe to join and then keep supporting the government in Ukraine in any way possible and practical.

See similar discussion below. 

(Don’t look now but even the Washington Port editorial doves are getting amazingly hawkish in its editorial reviews of President Obama and his fickle foreign policy, tan suit and all!) 



What Others Are Saying

From an Al-Jazeera (8-30-14) news story about fighting near the Iraqi town of Emerli.

Meanwhile the GCC group of countries - Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE - pledged on Saturday a readiness to fight the "terrorist ideology which is contrary to Islam". 

Saudi Arabia's King Abdullah warned that the threat from such armed groups would soon spread to Europe and the US unless it is quickly dealt with in the Middle East. 

"If no action is taken against IS, for sure after a month they will reach Europe and in another month they will reach the US. I'm telling you now and you have to keep this in mind. I call upon you leaders to take this warning seriously."




My friend and former Fannie colleague, Barry Zigas, writes in Housing Wire that most of the coming mortgage reform action will be at the FHFA agency level.


The Washington Post editorially laments “Putin’s Big Lie,” in its 9-1 edition. 


Maloni, 9-2-2014


Bill Maloni said...

Just to show readers that I don't choose my headlines (lead or otherwise) with little regard, just today I've been inundated with several mortgage finance matters that will make it into my next blog.

Anonymous said...

Enjoyed the well deserved commendation by you of the reign of David Maxwell. Fannie Mae was a financial wreck when he took over.
Please spend some time commentating on the reform issues that Barry Zigas has identified in his article.
When we can reach agreement on some of these issues, then it would be time for some reform legislation, legislation that would modify, not erase Fannie and Freddie.

Bill Maloni said...

Thanks Anon, hope to do so in my next blog.