The housing and mortgage industry keeps issuing predictions on how soon U.S. housing activity can recover from its current illness. On Friday, Fannie Mae
Mudd issued that prediction at the Washington, D.C.-based company's first annual meeting in more than three years. After its May 2004 meeting, the company fell victim to a $6.3 billion accounting scandal. But while Fannie Mae lost $1.4 billion in its most recent quarter, there are glimmers of a return to stability -- though not necessarily profitability -- for the long-beleaguered, government-sponsored entity.
The meeting got a shakeup from shareholder Evelyn Y. Davis, who urged Fannie Mae's directors to sack Mudd. She advocated Louis Freeh, a former director of the FBI and current Fannie Mae director, as a replacement, dubbing Freeh the only director she'd vote to re-elect. Her opinion apparently wasn't shared by most other stockholders, who voted to reconfirm the full slate of directors.
The newly scrubbed Fannie Mae will issue $7 billion in preferred stock for added liquidity. Mudd said the company is capable of surviving an extended housing collapse, but called the current situation "the worst housing and mortgage market in recent memory."
In my opinion, there's no "recent" or "memory" to it -- this is the worst-ever smashing of the U.S. housing and mortgage industries. For that, you might want to thank your friendly mortgage broker and lender.
Mudd's guess at a housing recovery's timing is no better than anyone else's. With the mortgage world in total disarray, mortgage lenders like Countrywide
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Fool contributor David Lee Smith holds no positions in any of the companies mentioned above. He does welcome your comments or questions. Fannie Mae is a former Inside Value recommendation. The Motley Fool's disclosure policy says, "REPLY HAZY, ASK AGAIN LATER."