Fannie Mae has limited subprime exposure, CEO says

WASHINGTON, Feb 23 (Reuters) - Mortgage finance company Fannie Mae (FNM.N) has very little exposure to the weakened subprime mortgage market and is positioned help the cash-strapped homeowners who relied on those loans, the company's chief executive said Friday.

"We have a very small subprime effort," said Dan Mudd, Fannie Mae's Chief Operating Officer, in an interview with Reuters. Subprime mortgages are those offered to borrowers with damaged credit.

"We have entered the market prudently with a lot of standards and high credit quality," he said.

In all, Fannie's subprime investments constitute "well below 2 percent of our book," Mudd said.

"Given the prudent and limited exposure that we have in subprime, we're positioned to be a positive force in expanding home ownership to those who have been just outside or on the fringes of the system," Mudd said.