Andrew McCormick was the SVP Portfolio Transactions for Fannie Mae during which time period Fannie Mae was later to be found guilty of “inappropriate accounting and inproper earnings management”. While Mr. McCormick’s role is somewhat secondary to the charges made against Fannie Mae by the Office of Federal Housing Enterprise Oversight, he was clearly aware of the methodology being employed to report higher earnings.

Furthermore, one of the salient points of the OFHEO findings is the deficiencies in how Fannie Mae in the accounting methodology of their portfolio. As Mr. McCormick was the SVP of Portfolio Management during this time, one has to attach some accountability to Mr. McCormick and his staff.

Lastly, the OFHEO report states that “The portfolio investment business had generated the majority of the net income” and, “Senior Management developed a business strategy [that]…involved aggressively expanding [Fannie Mae's] credit guarantee and portfolio investment business. The strategy also involved promoting an image of Fannie Mae as one of the lowest risk financial institutions in the world, in order to maximize the financial benefits of [Fannie Mae's] special relationship to the federal government. That image was false, since Fannie Mae took a significant amount of interest rate risk in the portfolio investment business and had serious operational deficiencies”.

So how does the SVP of Portfolio Transactions during this time period end up getting effectively a promotion at Impac?

For a complete review of the 348 page OFHEO findings, click here

Today, Impac Mortgage Holdings announced they have hired Mr. McCormick to assume the new position of Executive Vice President, Chief Investment Officer. His duties include “Securitization Structuring” and “all balance sheet investment decisions”.

Impac Mortgage Holdings, Inc. (NYSE: IMH), or the “Company,” a Maryland corporation, being taxed as a real estate investment trust (“REIT”), announces the hiring of Andrew McCormick who will assume the new position of Executive Vice President, Chief Investment Officer.
In this role, Mr. McCormick will be responsible for directing and overseeing of all balance sheet investment decisions, hedging policy decisions, pipeline hedging risk management, overall interest rate risk management and securitization structuring. Mr. McCormick will be chairperson of the Company’s Asset Liability Committee and a senior member of the Executive Committee.
Mr. Joseph Tomkinson, Chairman and CEO of Impac Mortgage Holdings, Inc. commented, “With over 24 years of transactional and risk management experience, Mr. McCormick brings a broad understanding to all aspects of building and managing a mortgage securities investment portfolio.” Mr. Tomkinson further commented, “With the addition of a professional portfolio manager to our senior executive management team, the Company will be better positioned to evaluate a wider array of investment opportunities while seeking to minimize interest rate volatility and diversify and reduce credit risk.”
Mr. McCormick previously served as Senior Vice President of Portfolio transactions at Fannie Mae. While at Fannie Mae, Mr. McCormick, was directly responsible for all on-balance sheet transactions for the world’s largest mortgage portfolio. Mr. McCormick led over 130 professionals to cover trading, sales and securitizations. Mr. McCormick was an active member of senior management committees, including risk policy, asset/liability, portfolio investment and mortgage securities policy. From 1996 to 1998, Mr. McCormick was responsible for all of Fannie Mae’s debt funding programs, which supported on-balance sheet assets, and was responsible for all liability hedging, including Fannie Mae’s derivative programs. Prior to Fannie Mae, Mr. McCormick was a Vice President, Fixed Income Securities at Morgan Stanley.