Now that the U.S. Senate has confirmed Bill Pulte as Director of the Federal Housing Finance Agency (FHFA), reports have it that Pulte’s top priority will not be removing Fannie Mae and Freddie Mac from government conservatorship.
Rather, he’ll focus on rooting out any fraud in the two companies, CNN reported Thursday, and ensure they are running efficiently.
Pulte, who will serve a term of five years, was confirmed by the Senate as FHFA Director in a Thursday morning, March 13 vote of 57-41, with Sens. Tammy Duckworth (D-IL) and Bernie Sanders (I-VT) not voting. Four Dems, including Angela Alsobrooks (D-MD), Ruben Gallego (D-AZ), Gary Peters (D-MI), and Elissa Slotkin (D-MI) voted with Republicans to confirm Pulte’s directorship.
“I am honored by President Trump’s trust as we usher in a golden age of housing and mortgage accessibility,” Pulte said as he was sworn in today. He added he would be "laser-focused on the safety and soundness of our regulated entities," those being the Fannie / Freddie government-sponsored enterprises, or GSEs.
That echoes some of what was heard at his Feb. 27 nomination hearing, where Pulte spoke about affordability in the U.S. housing market — something there’s been quite a lack of for some time — and other factors at play. “Housing and safety and soundness of the housing market is a bipartisan issue, and I firmly believe that we must work together to address the severe housing challenges that our country faces,” Pulte said.
He also spoke of the “devastating consequences of bad policy” on housing and the economy.
“In 2008, the housing crash nearly destroyed our family's legacy housing company,” Pulte contended. “In 2020, as a director of Pulte Homes, I witnessed how the COVID-19 pandemic placed an enormous stress on the housing finance system.” He added he believes all Americans should be able to raise their families in safe homes and neighborhoods, and urged the nation to build more houses to help alleviate its collective lack of inventory.
“President Trump is a builder,” Pulte commented, also referencing a coming "golden age," though with a subtle distinction. Under President Trump's leadership, he said, "we will usher in the golden age of homeownership. It is time to begin building again in America.”
While it may not be the very first priority right now for Pulte, the Trump Administration has voiced its intentions to remove the GSEs from conservatorship — though some researchers have called doing so a "Herculean task" that would have dubious benefits for mortgage rates.
Industry Response
A number of industry groups congratulated the new FHFA Director and praised his swift confirmation, pledging to work on that all-encompassing affordability issue in the U.S. housing market.
“Our members stand ready to work with Director Pulte and his team, Fannie Mae and Freddie Mac staff, the Federal Home Loan Banks, and other industry stakeholders to increase affordable and sustainable homeownership and rental housing opportunities for all Americans while ensuring a robust secondary mortgage market for single-family and multifamily lenders of all sizes and business models,” said Bob Broeksmit, president and CEO of the Mortgage Bankers Association (MBA), in a statement.
Scott Olson, executive director of Community Home Lenders of America (CHLA), added the group’s praise for Pulte’s confirmation and his focus on boosting affordable housing and homeownership, while urging that re-privatization of Fannie Mae and Freddie Mac be addressed — but not hastily.
"CHLA appreciates Mr. Pulte's commitment to affordable homeownership,” Olson stated. “We look forward to working with him on issues like preserving a broad base of GSE lenders, which benefits consumers, and taking Fannie and Freddie out of conservatorship in an orderly way.”
Seth Appleton, president of U.S. Mortgage Insurers (USMI), also congratulated Pulte, who he noted will “lead FHFA and oversee critical financial institutions that facilitate more than $8 trillion in funding for the U.S. housing market.”
“The private mortgage insurance industry has long worked with FHFA, Fannie Mae and Freddie Mac (the GSEs), the Federal Home Loan Banks, and other housing finance stakeholders to reduce barriers to homeownership and ensure access to affordable and sustainable mortgage credit backed by private capital,” Appleton stated.
Further, USMI “strongly agreed with” and called out a particular statement Pulte made at his nomination hearing regarding the private credit risk transfer, or CRT, market. “With regard to CRT, I think it's very important,” Pulte said. “I think anytime that you can take risk away from the taxpayers and give it to the private market is a win.”
Appleton noted USMI and its members “look forward to working with Director Pulte and his team at FHFA to accomplish that goal [i.e., taking risk from taxpayers and giving it to the private market] while also prudently ensuring access to sustainable mortgage credit for first-time homebuyers."
Rob Nichols, president and CEO of the American Bankers Association (ABA), said his group looks forward to Pulte’s leadership “in addressing the nation’s housing challenges.” ABA members “are eager to work with Director Pulte and other stakeholders in supporting a healthy and resilient housing market,” Nichols stated.
National Association of Realtors (NAR) Executive Vice President and Chief Advocacy Officer, Shannon McGahn, noted Pulte takes the reigns of FHFA “at a pivotal time, as we face historic housing challenges, including affordability concerns and a nationwide housing shortage.” NAR also pointed to potential reforms of Fannie Mae and Freddie Mac, for which the group exhorted prudence.
"FHFA oversees a housing finance system that is uniquely American, but whose reform is long delayed,” McGahn stated. “Fannie Mae and Freddie Mac, collectively the 'GSEs', are the backbone for middle-class homeownership and rentership. It is of the utmost importance that we take a measured and thoughtful approach to any GSE reforms.”
The National Association of Home Builders (NAHB) is “ready to work with Director Pulte to help address the nation’s housing affordability crisis by promoting policies that ensure stable and liquid mortgage markets for single-family and multifamily housing,” stated Buddy Hughes, chairman of NAHB and a home builder and developer from Lexington, N.C.
“Providing builders and homebuyers better access to financing will enable home builders to boost the supply of attainable, affordable housing to meet market demand and keep the economy strong,” Hughes added.
- What do you, NMP reader, think about Director Pulte's approach to leading the FHFA, and what the agency's priorities should be? Email [email protected] to share your views and feedback.
