The tasks in front of Charles "Ed" Haldeman Jr. might make even Hercules pause. As chief of mortgage giant Freddie Mac, Haldeman is trying to turn around a company that's lost $36 billion in the past two years, resolve the ongoing foreclosure fiasco and help extricate the country from the real estate bust, which analysts say is keeping a lid on the U.S. economy. Oh, and the U.S. Treasury Department is recommending that his company be shut down. "I now see what an unusual situation I am in," Haldeman says.

Freddie, along with its larger sibling, Fannie Mae, essentially owns 70 percent of U.S. home mortgages. Usually Fannie or Freddie buys mortgages from private lenders and resells them to investors, but since the housing crash, investors and lenders have been scarce, leaving them on the hook for tens of thousands of mortgages that have gone south. Fannie and Freddie are doing this while being propped up and overseen by the federal government, which critics say ties Haldeman's hands. "We're operating in an information vacuum," says Jim Vogel, executive vice president at FTN Financial Capital Markets, who keeps close tabs on the government-sponsored entity. Of late, the biggest point of contention is how to shrink or get rid of Fannie and Freddie within seven years. Suggestions range from fully privatizing the mortgage market essentially killing off Fannie and Freddie to limiting their role to backing loans only to low-income people and veterans. And buried somewhere beneath the brouhaha is the nagging question of whether taxpayers will ever recoup the $65 billion they lent to Freddie to keep it solvent. Haldeman is trying to regain some of that money by going after banks that sold Freddie mortgages that involved incomplete or false information.

Of course, it's not as if the even-keeled, sandy-haired Haldeman didn't know what he was getting into when he took the $5 million-a-year job in 2009. At the time, Freddie's chief operating officer had recently been fired, and its chief financial officer had committed suicide; the entity had gone through five CEOs in six years. Haldeman, 62, was tapped for the challenging position based on his work turning around Putnam Investments after it suffered from a financial scandal. From the mortgage giant's headquarters in McLean, Va., Haldeman spoke about the nation's real estate woes and whether the government should even be in the mortgage business.

What are the challenges of leading a company that might not be around in a couple of years?

We have 6,000 employees, and when they read headlines talking about a wind-down, they naturally get anxious, and that's a management challenge. The way we've handled that is to be very visible, open and transparent. We talked to them about what was in the Treasury paper, what was not and how it impacted our strategy. We had an open-mike Q&A, and some very thoughtful questions were presented.

Do you think the government should still be in the business of backing up mortgages?

There is a role for the government in housing finance, where the government is the ultimate backstop on mortgage-backed securities. Involvement at that level will allow the mortgage market to be largely a private-sector market. But because of the ultimate backstop, we'll be able to have lower mortgage rates than would otherwise be the case and more credit availability, even when credit is generally unavailable.

Why do you think it's still hard for some people to get mortgages?

It was too easy to get a mortgage in the boom period. We are conscious that we have an obligation to keep mortgage credit available and to make it available to large segments of the population. But if we extend credit and a mortgage to somebody who's not ready to be a homeowner and they lose their home, then we haven't helped anybody. That's what we're trying to avoid.

What do you think is the biggest misconception about Freddie?

I've often joked that if I went around to bars at night, I could make a great living betting people on the following set of statistics. Nine percent of all single-family mortgages are three months behind in their payments. I'll bet $5 whether you can get within two percentage points of what Freddie Mac's delinquency rate is. I'm sure everybody in the bar is going to bet that it is more than 9 percent, because everybody knows that Freddie's a big cause of the problem. Our actual number is 3.8 percent. We're not perfect, but it's less than half of what the industry is.

Do you think Freddie can ever make money again?

In some sense, in the third quarter we made money. We paid a 10 percent dividend [to the federal government on the money it lent the firm].

When you're not focusing on housing and mortgages, what are your hobbies?

Most people would say I don't have much of a life. I do like to play squash, tennis and golf. What I don't like to do much is go to black-tie events or dinner parties. I talk all day long for five days straight, so about the last thing I want to do is go there and talk.

Photograph by Andrew Cutraro for SmartMoney.