FHFA chief Mark Calabria and the Fannie Mae headquarters in Washington DC (Credit: Carr Properties)
President Trump has not been shy about his desire to end the federal conservatorship of Fannie Mae and Freddie Mac. Now, he appears to have someone at the helm of the Federal Housing Finance Agency ready to put the plan in action.
Newly installed FHFA chief Mark Calabria said he is working to re-privatize the two mortgage giants, which were brought under government control in 2008 following the housing market collapse, he said in an interview with the Wall Street Journal.
Ending the conservatorship of Fannie Mae and Freddie Mac has been a priority of federal lawmakers for a decade, according to the Journal. But with the Trump administration and Congress making a renewed push, Calabria said he is hopeful there could be movement on the front. But Democratic lawmakers have also criticized what they see as the administration’s go it alone strategy.
In late March, Trump signed a memo calling for the end of federal control over the two companies, and his administration is working on a set of proposals to achieve its goal. At the same time, Republican Sen. Mike Crapo released an outline of a proposal to end the federal conservatorship.
Officially ending the conservatorship will require Congressional action, but Calabria said he will work to overhaul the system to make re-privatization a smoother process. That could includes changes to the “qualified mortgage patch,” which allows for loans to homebuyers with higher debt-to-income thresholds, the Journal reported.
Calabria said he will not act to allow Fannie and Freddie to keep its profits, which currently are directed to the U.S. Treasury Department. Reversing the policy would allow the mortgage securers to re-capitalize ahead of a privatization, but Calabria said he prefers to enact one sweeping overhaul instead of piecemeal changes. [WSJ] — Joe Ward