Charles E. “Ed” Haldeman, Jr., CEO of Freddie Mac, talked with students Tuesday, September 13 about the US housing market and leading during challenging times as the first speaker in the School’s 2011-12 David and Lyn Silfen Leadership Series.
As a result of the 2008 financial crisis, the US treasury currently owns 80 percent of Freddie Mac, a publicly traded company that is the nation’s second-largest source of mortgage financing. The company is still struggling to rebuild. For Haldeman, hired as Freddie Mac CEO in 2010, the position represents the latest in a 35-year career in finance and corporate leadership. He is the company’s sixth CEO in as many years. “It was an incredibly difficult time for employees and for [me, as] the person leading them,” Haldeman said.
But Haldeman is no stranger to challenges; he was tapped for the position in part for his experience as CEO and president of Putnam Investments, where in 2003 he was charged with reorganizing the business and improving policies and compliance following probes into the industry’s business practices. He then served as chairman of Putnam Investment Management, the investment adviser for Putnam Funds, from July 2008 through June 2009. Haldeman was also chairman of the board of trustees at his alma mater, Dartmouth College, during a controversy over the size of the board.
“The most common question I’m asked [as CEO of Freddie Mac] is, ‘why did you take the job?’” Haldeman said. “I thought I could add value. At my age, I’m more focused on the present than the future, which is what Freddie Mac needs right now. I had my experience at Putnam and the mutual fund scandal, as well as controversy at Dartmouth, as guidance. And I wanted to be a part of bringing stability back to the housing finance and mortgage industry.”
A large part of Haldeman’s job at Freddie Mac is to restore the confidence of his employees. He regularly holds town hall sessions, sends weekly voicemails, and has coffee breaks with employees. Haldeman says he wants his employees to know him as a person. “That’s important in all leadership positions but especially if you’re leading in difficult times.”
He regularly reminds employees that more than 90 percent of single-family mortgages in the country come from Freddie Mac, its competitor Fannie Mae, and the Federal Housing Administration. “We assure employees that what they’re doing is critical to the future of the American economy,” Haldeman explained. “We tell them they’re helping families to stay in their homes. What motivates employees most is if they know what they are doing is important, that it makes a difference.”
Moving forward, Haldeman sees Freddie Mac as a crucial partner in supporting government initiatives to strengthen the economy. Haldeman supports the Obama administration’s Home Affordable Refinance Program, saying that refinancing helps homeowners meet their monthly mortgage payments and have more disposable income. In addition, he believes large-scale renting of single-family properties has possibilities, though details need to be worked out.
“Both sides of the aisle — all of us — believed in the American dream of home ownership. Worldwide, housing is seen as a stable, tangible investment, and we all have to realize that housing can go down. Not everyone should own a home, especially if it limits labor mobility,” Haldeman said. “But I do think that every American should have a reasonable opportunity to buy a home if it’s in their best interest.”