Michael DeVito, Wells Fargo's former Executive Vice President, Housing, will take over as Freddie Mac's full-time CEO on June 1.
DeVito will replace interim CEO Mark Grier, who will return to his duties on the board of directors from Freddie Mac. Grier assumed the interim role in March after David Brickman retired and stepped down from CEO in January.
"Michael is a respected leader with a proven track record in nearly every area of the mortgage industry," said Sara Matthew, the non-executive chairman of Freddie Mac's board of directors, in a press release. "His background and experience make him an excellent choice to lead Freddie Mac at this point in time."
DeVito steps into the role as the debate continues over the future of Freddie Mac and Fannie Mae following January's changes to the preferred stock purchase agreement, the contractual arrangement that put state-sponsored companies under federal control.
Mark Calabria, director of the Federal Housing Finance Agency, wants the GSEs to raise enough capital to end the conservatories. However, a recent report from Keefe, Bruyette & Woods says it could take at least 15 years at the current rate of retained earnings. Even then, the US Treasury Department would likely exercise its rights to convert the growing preference stock preferences into common stock if it did.
Michael DeVito is the new CEO of Freddie Mac
DeVito worked with Wells Fargo for over 23 years. Following the firing of Franklin Codel, who led all aspects of consumer lending at the bank in relation to the improper dismissal of a former employee, he was initially appointed to lead the home loan unit in November 2017.
In January 2018 DeVito got the full-time job that he held until his retirement in July 2020 and whose successor was Kristy Fercho.
Prior to taking the top position in Wells Fargo's mortgage division, DeVito oversaw the manufacturing and service units at various times during his tenure. He also led standard services, credit workouts, and underwriting and operations of the mortgage retail business. At one time he was head of finance for education at the bank.
"I thank the board of directors for their trust and look forward to meeting the people and leaders who make Freddie Mac so successful," DeVito said in the press release of his appointment to Freddie Mac. "I am sure that together we can continue to deliver the liquidity, stability and affordability that real estate markets need, while improving our own security and soundness at the same time."