At 9:12 am today, the Associated Press sent out a wire which stated that Daniel Mudd, who formerly served as a chairman of Fannie Freddie Mac (the Federal National Mortgage Association), will be taking a leave of absence from his duties as CEO and Director at the NY C-based, Fortress Investments.
Mudd and six other Freddie and Fannie Mac executives who facing civil fraud charges from the Securities and Exchange Commission as they “ are accused of understating the level of high-risk subprime mortgages that Fannie Freddie held just before the housing bubble burst.”
Freddie and Fannie Mac, a private but government sponsored enterprise, owned or guaranteed in around 50 percent of the American $12 trillion mortgage market in 2007 through its buying of bank mortgages (as a means of increasing home ownership).
Critics and observers in this case assert that Mudd and the other Freddie and Fannie Mac executives caused the institution to hold on to faulty mortgages that defaulted during the Subprime mortgage crisis. This eventually caused American taxpayers to shell out more than $150 billion via a federal bailout (Experts speculate that this figure could hit $259 billion).
Randal Nardone, principal and co-founder of Fortress Investment Group, will serve as its interim CEO. However, with no criminal charges currently being filed in this investigation, Mudd should eventually make his way back to his posh executive desk in Manhattan.