Leland Brendsel is a man on the run.

The once-chunky Freddie Mac chairman has become a lean and mean fitness devotee who sometimes works out twice a day.

He sponsors and participates in long-distance runs to benefit children's shelters. And he sometimes holds strategy sessions with colleagues during vigorous treadmill sessions in the fitness center company headquarters in McLean, Va.

A Demanding Mission

He is also running hard to maintain Freddie's long-standing record as a company that rewards its shareholders handsomely while fulfilling its federal mandate to help finance homeownership.

That mission is perhaps more demanding than ever and won't afford Mr. Brendsel much of a breather. He faces several critical challenges in coming months.

* He must buy time for meeting new targets for low-income lending mandated by Congress.

* He must learn to live with the new agency established to oversee the Federal Home Loan Mortgage Corp. and its downtown Washington rival, the Federal National Mortgage Corp. The head of the oversight agency, Aida Alvarez, is seeking a hefty budget to recruit a muscular staff and seems likely to get it.

* He needs to maintain investor confidence in his company's ability to prosper even when the boom in mortgage refinancings ends. (See article, next page.)

At the same time, Mr. Brendsel is engaged in a come-from-behind effort to beat out Fannie Mae as the primary force in the secondary market.

Taught College Finance

Mr. Brendsel, a 51-year-old native of South Dakota, has been involved in finance all his adult life, including stints as a finance professor at the University of Utah and Northwestern University.

He joined Freddie as chief financial officer in 1982 and became chief executive in 1988.

Thus, he has had a key role in the company's rapid growth and spearheaded its 1989 transition from ownership by thrifts and the Federal Home Loan banks to a publicly owned corporation.

He is not inclined, by personal style or by his seasoned business judgment, to make any drastic changes in what is indisputably a very successful company. His approach is a steady hand on the tiller and he is suspicious of special programs. "We must make any programs a regular part of our business, or they don't get efficient," he says.

Says Perspective Is Needed

Asked about the push to meet the targets for lending to people with low and moderate incomes, Mr. Brendsel said some perspective was required.

"One of our true success stories is that the low-income household in Des Moines can compete with the largest corporations in America for investments by pension funds," he said.

Congress, though, raised questions last year as to whether the federally franchised housing agencies were sufficiently helping households at the lower end of the income scale.

A proposal drafted by the Department of Housing and Urban Development under the new law would require that 28% of Freddie Mac's purchases be from the low-income and moderate-income brackets by the end of the year. Fannie Mae gets a 30% target. In addition, Freddie must seek to ensure that 26% of its purchases be from inner cities, and Fannie must aim for 28%.

Picks His Words Carefully

Neither agency has seemed particularly enthusiastic about the proposal, but both have vowed to give it their best shot.

Typical of a veteran of the Washington scene, Mr. Brendsel chooses his words carefully when discussing touchy topics.

"Overall, what we are doing is to continue to expand and build on the success that Freddie Mac has already had in serving the market" for low-income and moderate-income housing, he said. "We want to improve on this system."

A key element, he said, is the introduction of a new program to finance multifamily housing. The agency ran into credit-quality problems with its previous multifamily efforts starting in 1990 and exited the market while overhauling its program.

New Delinquencies Easing

These problems were the principal reason why Freddie was granted a slightly softer intermediate target than Fannie.

Meanwhile, Freddie continues to show high foreclosures in its existing multifamily portfolios - 5.79% of dollar value - partly because of the portfolio's declining size. Single-family foreclosures, by contrast, were under 1%. New delinquencies, however, appear to have eased.

Last year, Freddie announced its return to multifamily lending, saying it would make $1.5 billion available for refinancings by the end of 1993.

Mr. Brendsel said Freddie is using technology to help it meet the so-called 30-30 targets. "We want to build on our extensive knowledge of underwriting and conduct massive analysis and research into what makes up quality in mortgage loans," he said.

"We intend to use technology, including automated underwriting, to improve and speed up the decision-making."

Focus on Income Reliability

One result of such efforts, he said, was the discovery that the breadwinners in inner-city families have income from several different jobs or may change jobs frequently, but still produce a steady flow of income.

Freddie Mac, he said, has now changed its rules to focus on the reliability of income over time rather than on job history.

The emergence of a new regulator doesn't seem to faze Mr. Brendsel. He says Freddie Mac supported the legislation that created the Office of Federal Housing Enterprise Oversight. "We think the approach reflected by that legislation is sound and will enable us to continue to be responsive to borrowers as well as to investors," he said.

Asked how he felt about having yet another organization looking over his shoulder, he replied: "We do not anticipate a relationship where they are second-guessing decisions and actions we are taking as long as we are financially sound and adequately capitalized."

Closing the Gap on Fannie?

Then there's the Hertz-Avis battle with Fannie Mae. While Fannie has held a clear lead in market share for the past few years, Freddie appears to be closing the gap.

In the first half of this year, Freddie Mac accounted for 43.9% of the loans purchased by the two agencies, up from 41.3% in the first half of last year. Freddie emerged as an avid buyer of adjustable-rate mortgages.

Mr. Brendsel is tactful when discussing the rivalry.

"Freddie Mac has distinguished itself as a highly reliable partner," he says. This reliability seems to be the watchword of Mr. Brendsel's stewardship. The company is even using the logo "Steady Freddie" on some of its communications.

"We have been an innovator in the secondary market," he continues, "while Fannie Mae has tended to hold more in its own portfolio."

Building Investment Portfolio

But even this distinction could be fading as Freddie Mac builds its investment portfolio of mortgages to stabilize earnings when the refinancing boom finally ends.

Shareholders are certainly happy with Steady Freddie. So are the institutions that invest in the corporation's mortgage-backed securities.

In a volatile place like Washington, the steadiness that Mr. Brendsel has brought to the Federal Home Loan Mortgage Corp. could stand out like a beacon of virtue. But if the expectations of regulators and Congress aren't met, that same steadiness can look like complacency.

Leland Brendsel clearly wants to make sure Freddie's virtues are understood. And that's one more reason for him to keep on running as fast and as far as he can.

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