Freddie Mac to name Layton CEO: WSJ report

Tue May 8, 2012 7:22pm EDT

The headquarters of mortgage lender Freddie Mac is seen in Mclean, Virginia, near Washington, in this September 8, 2008 file photo. REUTERS/Jason Reed/Files

The headquarters of mortgage lender Freddie Mac is seen in Mclean, Virginia, near Washington, in this September 8, 2008 file photo.

Credit: Reuters/Jason Reed/Files

(Reuters) - Freddie Mac is preparing to name Donald Layton, the former chief executive of online brokerage E*Trade Financial Corp, as its next CEO, the Wall Street Journal said on Tuesday.

Citing people familiar with the matter, the report said the company is expected to announce the hiring as soon as Thursday.

The Journal said the appointment would end a six-month search for the mortgage giant's third chief executive in the four years since the government took control of it. Layton will replace Charles Haldeman, who said in October he would step down this year.

Freddie Mac declined comment on the Journal report.

The Journal said Layton had been considered the front runner for the job for more than a month. His appointment is subject to approval by the Treasury Department and Federal Housing Finance Agency, which regulates Freddie and Fannie Mae.

The report said two years ago, the Treasury Department named Layton an outside director of American International Group Inc (AIG.N), the insurer that received a government bailout in 2008. On that board, he serves alongside Christopher Lynch, who became chairman of Freddie Mac in December.

Last week, Freddie Mac, the No. 2 provider of U.S. mortgage money, said it will seek another $19 million in taxpayer aid after its quarterly profit failed to make up for a dividend payment to the government for its controlling stake.

The company has drawn $72.3 billion from the U.S. Treasury since being seized by the government in 2008, and has returned $18.3 billion as the price for the taxpayer support.

For the first three months of the year, Freddie Mac reported net income of $577 million, down from $676 million in the year-ago quarter. The drop was mainly due to derivatives losses totaling $1.06 billion, up from $427 million a year earlier and $766 million in the previous three-month period.

The company, whose aid request was down from the $146 million it needed to stay afloat in the prior quarter, warned it was unlikely to generate enough profit to cover its dividend payments any time soon.

(Reporting by Steve James and Margaret Chadbourn; Editing by Gary Hill and Steve Orlofsky)

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