Fannie Mae shook up its senior management in a move it said was designed to drive the mortgage company's efforts to conserve capital and contain a surge in costs stemming from defaults by homeowners.

Peter Niculescu

The company, struggling with losses that have called into question its ability to survive without a government bailout, announced the departures of Robert Levin, a 27-year veteran who was chief business officer, and two executives who joined within the past two years: Stephen Swad, who was chief financial officer; and Enrico Dallavecchia, who was chief risk officer.

Fannie promoted Peter Niculescu to chief business officer with broad responsibilities for the businesses of providing guarantees on mortgage securities and investing in such securities, as well as for raising capital and managing debt needs. Mr. Niculescu, 48 years old, joined Fannie in 1999 after working as a top bond-market analyst and strategist for Goldman Sachs. In recent years, he has been responsible for managing Fannie's holdings of mortgages and related securities, which currently total about $758 billion.

Fannie also named David Hisey, 48, formerly controller, as chief financial officer. Michael Shaw, 61, formerly a senior vice president, becomes chief risk officer. David Benson, 48, another senior vice president, was named executive vice president for capital markets and treasury. Reporting to Mr. Niculescu, Mr. Benson will manage the mortgage portfolio.

Fannie officials said the moves were designed to put people who have dealt with previous mortgage-industry shakeouts in the most vital jobs at a time when the worst housing slump in decades requires crisis-management skills. The shake-up establishes Mr. Niculescu as the second-most powerful executive at Fannie, after Chief Executive Officer Daniel Mudd, though Chief Operating Officer Michael J. Williams retains a big role. Robert Napoli, an analyst at the securities firm Piper Jaffray in Chicago, welcomed the promotion of Mr. Niculescu, saying "he has a lot of credibility outside Fannie Mae."

A Fannie spokesman said Messrs. Swad, 47; Dallavecchia, 46, and Levin, 52, declined to comment.

Fannie and its smaller rival, Freddie Mac, own or guarantee more than $5 trillion of U.S. home mortgages, nearly half of those outstanding. As more Americans default, they have recorded combined losses of about $14 billion over the past four quarters, and some analysts believe they won't return to the black for several years.

In July, Congress gave the Treasury authority to prop up the companies if needed through loans or equity investments, moves that some investors fear could reduce or wipe out the value of common and preferred stock.

On Wednesday, Fannie and Freddie shares rallied for the third day in a row amid growing hopes that the companies might be able to avert a bailout that would be disastrous for current shareholders. In 4 p.m. composite trading on the New York Stock Exchange, just before the shake-up was announced, Fannie shares were quoted at $6.48, up 86 cents, or 15%. They fell nine cents to $6.39 in after-hours trading. The stock is down about 90% from a year ago.

A spokeswoman for the Federal Housing Finance Agency, which regulates Fannie and Freddie, declined to comment on the management changes.

Fannie said Mr. Levin plans to retire after 27 years with the company, Mr. Dallavecchia intends to "pursue other opportunities in finance and risk management," and Mr. Swad will "pursue opportunities in private equity."

Fannie's chairman, Stephen Ashley, said the board is "firmly committed" to Mr. Mudd, a former Marine officer who has served as CEO since 2004.

Write to James R. Hagerty at bob.hagerty@wsj.com and Aparajita Saha-Bubna at Aparajita.Saha-Bubna@dowjones.com

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