Fannie Mae

(FNM)

handed its acting chief the full-time CEO job.

Fannie named longtime

GE

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exec Daniel Mudd president and chief executive Wednesday. The Washington-based mortgage giant said it made the choice in consultation with its regulator, the Office of Federal Housing Enterprise Oversight. Fannie said Chairman Stephen Ashley would stay on in that role as well.

"The Board wanted to see a transformation at Fannie Mae," Ashley said. "Over the past six months, Dan Mudd has begun to put Fannie Mae on the right track, and we are confident that Dan will continue to lead the company in this new direction."

Mudd had been interim CEO since Fannie's previous chief, Franklin Raines, left under fire late last year.

CEO Raines and CFO Timothy Howard were forced out Dec. 21 after OFHEO issued a statement indicating that the company was "significantly undercapitalized" and might not have the financial wherewithal to survive a market shock or similar event.

Raines had long defended the company's accounting despite mounting evidence that it wasn't proper.

Fannie dropped a nickel Wednesday to $59.19.