Federal Court Declares FHFA Structure Unconstitutional

Jul 17, 2018

The Consumer Financial Protection Bureau has filed a proposed stipulated final judgment to resolve its allegations in its lawsuit against California mortgage lender

A federal court has issued a ruling that found the leadership structure of the Federal Housing Finance Agency (FHFA), the regulator of Freddie Mac and Fannie Mae, to be unconstitutional.

According to a Washington Examiner report, a three-judge panel for the U.S. Court of Appeals for the Fifth Circuit ruled that the FHFA structure ran afoul of the Constitution because it did not answer to the president and its director could not be removed by the president except for cause. “We hold that Congress insulated the FHFA to the point where the Executive Branch cannot control the FHFA or hold it accountable,” the judges wrote in an unsigned opinion.

The FHFA was created in 2008 in response to the collapse of the government-sponsored enterprises. The judges ruled that the law related to the FHFA’s duties must be changed to allow for the president to remove the director at will.

The ruling came in response to a lawsuit brought by shareholders in Freddie Mac and Fannie Mae who claimed that were cheated in 2012 when the Treasury took all of the two companies’ profits rather than just a 10 percent dividend. The court ruled 2-1 against that part of the lawsuit.

The FHFA did not publicly comment on the court’s ruling.

About the author

Phil Hall

Link copied

Published

Jul 17, 2018

Opinion

How To End A Real Estate Agent Relationship Professionally

When communication breaks down, expectations don't align, or respect disappears, LOs may need to move on — without burning bridges

Loan originators talk all the time about winning the trust of real estate agents. How to prospect them, how to add value, how to earn referrals. But there is another conversation we do not have enough of.Sometimes, as a loan originator, you need to fire a real estate agent....

Courts

OneTrust Sues EMC, UWM, Former Employees Over Alleged Loan Diversion Scheme

The complaint alleges former employees secretly funneled borrower information and loan opportunities to EMC and UWM

OneTrust Home Loans is suing E Mortgage Capital (EMC), United Wholesale Mortgage (UWM) and 31 former employees of its former Arizona division, alleging a coordinated effort to poach staff, steal trade secrets, and divert more than $31 million in loan volume.The lawsuit, file...

Sep

Dallas, TX

More from

Regulation and Compliance

MISMO Launches AI Governance Framework For Mortgage Lenders

New FRAME toolkit gives lenders, servicers, and technology providers a roadmap for managing AI risk while supporting innovation

Regulation and Compliance

Jun 11, 2026

CFPB Tells Lenders Immigration Status Can Factor Into ATR Analysis

CFPB frames immigration status as a potential ability-to-repay factor when future U.S.-based income is at risk

Regulation and Compliance

Jun 10, 2026

UAD 3.6 Deadline Nears; First American Earns Verification

First American's ACI Sky Workbench gains verification ahead of the Nov. 2 implementation date for the GSEs' updated appraisal reporting requirements

Regulation and Compliance

Jun 08, 2026

MISMO Introduces New Loan Boarding Standard

Wrapper Files support standardized data transfers between origination and servicing systems, with potential savings of $60 to $160 per loan

Regulation and Compliance

May 29, 2026

The GLBA Compliance Gap Your AI Deployment Just Opened

Old statutes, new models, and the vendor contract you signed before machine learning became operational

Regulation and Compliance

May 26, 2026

FHA Keeps Tri-Merge Credit Reports While Expanding Approved Scoring Models

HUD says FHA lenders will continue using three-bureau credit reports even as the agency adopts newer scoring models aimed at increasing competition and modernizing mortgage underwriting

Regulation and Compliance

May 26, 2026

Popular