ORGANIZATION CASE STUDY: Fannie Mae relies on PR to bond with new homeowners

An integrated strategy helps Fannie Mae's PR department effectively communicate with various stakeholders, including first-time homeowners, Congress, and the financial press.

An integrated strategy helps Fannie Mae's PR department effectively communicate with various stakeholders, including first-time homeowners, Congress, and the financial press.

Fannie Mae, the government-sponsored enterprise (GSE) formerly known as the Federal National Mortgage Association ("FNMA," spoken quickly, sounds like "Fannie Mae"), was born in 1938 to aid in freeing up capital during the Great Depression. Compared to many other financial companies, Fannie Mae's operations are relatively simple, but interpretations by several different groups of crucial stakeholders make implications for the communications team very complex, creating the necessity for a large, yet tightly run department. Fannie Mae, along with troubled sibling Freddie Mac, is a major player in the secondary-mortgage market. The two companies, created by congressional mandate, buy mortgages from banks and group them together according to interest rates to make a security (usually bonds) that can be sold to investors. The difference between the interest rates of the mortgage-backed bonds and the investors' return is the source of Fannie Mae's revenues. "Our job is to strategically support the business goals of the company," says Janice Daue, VP of news and public affairs. "There are things that we do proactively, but we also try to be respondent to reporters. Many of our PR efforts are communicating with community lenders and organizations, and promoting mortgage-finance products to minority homeowners." Reaching out to various stakeholders The financial press is only one of Fannie Mae's critical stakeholders. Others are shareholders (as the GSE is publicly traded), lenders such as banks, and debt investors who, according to Daue, are approximately one-third international. While homeowners are not direct stakeholders, because they often do not know if their mortgage has been sold to Fannie Mae, the communications team will aid in efforts that highlight and promote the company's reputation and purpose. Much of Fannie Mae's literature, including its website, holds the motto, "Our business is the American dream." Fannie Mae does not purchase mortgages worth more than $322,700, so many of the company's initiatives focus on new homeowners, minorities, and immigrants who may be buying real estate for the first time. Another very important stakeholder is the government. Because of their GSE status, both Fannie Mae and Freddie Mac receive $2.25 billion lines of credit with the Treasury Department, and are not required to pay state or local taxes. (Fiscal conservatives are not fond of this arrangement.) Communications is an integral part of Fannie Mae's main function. Under SVP Chuck Greener, the department, which has between 50 and 60 members, is divided into specialized "beats," which work separately and cross-functionally to ensure that operations run smoothly, no matter what the economic or political climate may be. (Investor relations is under a separate SVP, Jayne Shontell.) Greener says, "We have a number of people who work in national and regional offices with communications people, and they work with the regional media on projects across the US as it relates to initiatives that we have underway across the company on homeownership to underserved Americans." Communications is divided into three departments: corporate communications, editorial services, and news and public affairs. Corporate communications, under VP Charlene Kramer, houses advertising, which produces internal branding materials and reputation commercials; communications management, responsible for internal communications and video services; marketing communications; and new media, which handles the website. Editorial services, under VP Jeff Denny, includes executive speeches, research and information, and corporate scheduling and events. This department is crucial to the functioning of major announcements and initiatives. News and public affairs, headed by Daue, includes financial communications, mission communications, single-family business news, regulatory news, and the consumer resource center, a call center where consumers can call to get mortgage product information and lists of lenders. Many of these functions communicate with the media, both proactively and reactively. Daue says, "We try to provide consistent factual information. If we see articles that may not represent what we perceive to be an accurate representation, we try to be responsive to questions." Government relations Regarding government relations, Greener says that his department is in constant contact with policy-makers, and the media relations team is ready for the many kinds of stories that reporters want to write. Asked about the necessity to constantly clarify and justify Fannie Mae's actions to Congress, Daue says, "It is our goal to help educate members of Congress, but it's in Congress' best interests to have information about the company. In addition to that, it's very important that people know we're an SEC-registered company. Therefore, it is important that the financial press get information about financial disclosures." The communications team works comprehensively for such a large organization, thanks mainly to the company's intranet and weekly meetings with managers and the entire group. "Each week, we meet first with the senior managers to go through all of the different communications and company issues," Greener says. "We meet with all staff on Friday mornings, where we outline past and future events, and give people a chance to ask questions. The other thing we do is make extraordinary use of our intranet service to communicate across the company and across our group - sending information out, a statement that our CEO made, and highlighting awards - to make sure that people are aware of what's taking place." One of the key factors that makes the communications team successful as an integrated group is the complete support of CEO Frank Raines. "The truth of the matter is that we are fortunate to have a CEO who places a value on external and internal communications," Greener says. "He devotes a good amount of time, energy, and resources to this area. As a consequence, I generally interact with him on a daily basis. He really understands communications, and it's very gratifying and rewarding." Recently, Fannie Mae has had to deal with the accounting scandal and subsequent CEO replacement at Freddie Mac, and the strategy has been to emphasize that all of Fannie Mae's financials are not only available, but fully audited. Daue says, "The main difference is that Fannie Mae is SEC-registered. All of our information is available. Freddie Mac has not done that yet. We have tried to make an effort to put questions [regarding the differences between Fannie Mae and Freddie Mac] to [CEO] Frank Raines on the website." Greener says that the communications team's main strategy is one of complete transparency, where they try to be as fact-based as possible. "As for questions related to accounting, we find ways to become even more available to answer those questions," he explains. Future challenges As for the future, the communications team has a few challenges ahead. In addition to fulfillment of the American Dream Commitment, in which Fannie Mae pledged to provide $2 trillion in financing for underserved families, including $700 billion for minority households, they will respond and adapt to a shift in which the corporation will see broader regulation as they move from beneath the Department of Housing and Urban Development to the Treasury Department. "We have a big challenge ahead of us as a company," says Greener. "As you look to this new decade, there will be 30 million new homeowners. There will be expanding homeownership as new populations come. We have the challenge of sending this American Dream to them. That is a significant challenge that drives our entire mission. All of our communications are directed to it." ----- PR contacts SVP of communications Chuck Greener VP, news and public affairs Janice Daue VP, editorial services Jeff Denn VP, corporate comms Charlene Kramer

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