A lot of numbers are getting thrown around as Congress gears up to determine the fate of Fannie Mae and Freddie Mac.

We hear about the $150 billion in Treasury aid that the government-sponsored enterprises (GSEs) have received; the $1.5 trillion combined portfolio; the lavish compensation packages offered to top executives. But the human element—the impact of this debate on Fannie and Freddie’s employees—is often missing from this political rhetoric. And the multifamily industry is growing increasingly worried that a brain drain will occur at the GSEs given their precarious and uncertain status, said executives at the 2011 Apartment Finance Today Conference earlier this week.

“What worries me everyday, and by extension should worry the industry, is retention of key human capital at the GSEs,” said Mike McRoberts, vice president of multifamily production and sales at McLean, Va.-based Freddie Mac, at the conference. “Our employees go to parties, or talk to their families about what they just read in the paper, and they have to answer their kid’s questions about, ‘Why are you such bad people?'”

“It’s tough to live in that environment,” he added.  
In the House of Representatives, there are currently eight different bills introduced by Republicans in a piecemeal approach—each bill seeks to wind down different aspects of the GSEs. Rep. Spencer Bachus (R-Ala.), who chairs the House Financial Services Committee, recently sponsored legislation that would pay GSE employees on a pay scale modeled after government workers.

“It isn’t easy when you show up and see something that says all the Fannie and Freddie employees will now be transitioned over to government wages,” admitted Heidi McKibben, vice president and head of multifamily for Washington, D.C.-based Fannie Mae. “It’s hard when you step into the office to tell all the people who work for us thank you very much for showing up.”

Over the past two years, the top six executives at the GSEs received $35.4 million in compensation. That’s a heady figure, to be sure. But it’s the people working in the trenches at the GSEs who are also in the political crosshairs.

“I’m extremely worried about it—people have to see a future; they have to believe that they’re doing something important,” said Shekar Narasimhan, managing partner at Washington, D.C.-based Beekman Advisors, in a telephone interview.

The rhetoric on Capitol Hill thus far hasn’t dealt with the human capital issue. “There’s nobody out there articulating a specific plan,” Narasimhan says. “If the Hill or the president tells us what they envision in some level of detail, we can keep these people together. Otherwise, I think one year from now, we will be in crisis mode.”

Thus far, the GSEs have been able to retain most of their top multifamily executives. Yet, should the brain drain accelerate, that’s bad news for any GSE borrower. “If we lose our human capital, we’re going to have a very difficult time in our industry to provide the level of customer service we’ve been able to provide,” McRoberts said.

Although more private sector competition has entered the market of late, the multifamily industry still relies very heavily on the GSEs. Indeed, the GSEs accounted for more than 60 percent of all multifamily debt originations last year. But as the political rhetoric heats up on Capitol Hill, one of the top challenges for Fannie and Freddie execs is in keeping morale up, and in keeping employees.

“Some very talented people have left the multifamily group to go to other places,” said John Cannon, an executive vice president who leads agency production at Horsham, Pa.-based Berkadia, at the conference. “There’s a bit of a brain drain already starting to happen.”