Last week's management shake-up at Fannie Mae has focused attention on the executives who must guide the company through the credit crisis, and especially on the man who is taking over its most important divisions.

Peter Niculescu, a longtime Fannie executive who once worked at Goldman Sachs & Co. under Treasury Secretary Henry Paulson, was named chief business officer, in charge of Fannie's credit and guaranty operations.

In an interview Friday, Mr. Niculescu, 48, said that the mortgage market remains "unpredictable" and that controlling credit losses and managing risk will be Fannie's "primary driving issue."

"There is no question that our balance sheet is constrained by our ability to fund, which it is," Mr. Niculescu said. "We are still having a very significant impact on the market by being about to issue mortgage-backed securities and guarantee it — and equally we incur the credit risk, and we have to manage that."

Fannie Mae is in contact with its regulators "on a daily basis" and is improving its accountability and decision-making, he said.

"We've seen bad news, we've seen a little bit better news, and there are signs that the rate of" home price "decline may be lessening," he said. "It's a mixed signal, a mixed bag, and housing is not out of the woods yet, but I think we're equipped for this market."

Mr. Niculescu will oversee credit management and Fannie's credit guaranty business, one of the bright spots, in which originators pay fees for the implied government guarantee. (Fannie increased pricing on all loans by 25 basis points, which will bring its adverse market delivery charge to 50 basis points starting Oct. 1.)

After climbing most of last week, shares of both Fanne and Freddie Mac plunged roughly 14% Friday. Since Jan. 1 each company has seen more than 80% of its market capitalization evaporate.

Mr. Niculescu said the United States is facing a housing crisis "that we haven't seen here in 70 years."

"The scale and magnitude across an economy of this size is extraordinary," he said.

Making information available will help to resolve the crisis, he said. "What is most important is getting truth out and speaking truth to people in a position of accountability and authority," he said. Fannie "is doing everything we can to provide financing to serve lenders and ultimately, homeowners."

Before joining Fannie Mae in 1999, Mr. Niculescu was a managing director and co-head of fixed-income research and strategy at Goldman Sachs, where he had joint oversight of quantitative modeling. He said he met Mr. Paulson, Goldman's chief executive at the time, "once or twice — we knew each other slightly."

Also last week, David Hisey was promoted to chief financial officer at Fannie and Michael Shaw to chief risk officer.

To cut its losses, Fannie has increased its reviews of defaulted loans, with a specific focus on alternative-A loans, and it has opened offices in Florida and California in an effort to reduce defaults and manage real-estate owned properties.

Frederick Cannon, the chief equity strategist at KBW Inc.'s Keefe, Bruyette & Woods Inc., called Mr. Niculescu "very impressive" and "cerebral," but noted that "one guy can't restore confidence in Fannie."

The principal risk for both Fannie and Freddie is whether they have enough capital to continue providing support to the mortgage market, an issue that "remains unresolved," Mr. Cannon said.

Gary B. Townsend, the president and CEO of the investment firm Hill-Townsend Capital LLC, in Chevy Chase, Md., said Fannie's management changes "were essential" to restoring confidence in the market.

Mr. Townsend, a former chief examiner with the Federal Home Loan Bank System, said the Treasury Department is exercising "regulatory forbearance" by giving the GSEs' stock prices time to rebound. This way they will be "better able to raise capital," he said.

The sharp second-quarter revision of real gross domestic product growth to above 3% last week helped to create "a bit more optimism" about the GSEs' outlook, Mr. Townsend said. Better-than-expected economic trends could lead to a leveling off of foreclosures and delinquencies, he said.

David Hamermesh, a research director for consumer lending at TowerGroup Inc., an independent research firm owned by MasterCard Inc., said a critical threshold comes this month, when both GSEs have to refinance roughly $225 billion in short-term loans. (Fannie Mae has about $120 billion of debt maturing through Sept. 30, while Freddie Mac has $103 billion, according to Barclays Capital.)

"We won't be able to say they're clear until they're really past that hurdle," Mr. Hamermesh said.

More problematic is that Fannie and Freddie are "not the only institutions that have lots of debt that needs to be rolled over," which will result in "competition in the capital markets," he said.

"There is concern that there will be enough buyers to step in."

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