In a possible presage to combining the two government housing enterprises into a single company, the new head of the Federal Housing Finance Agency (FHFA) has cleared the deck at Fannie Mae and Freddie Mac and installed himself as chairman of both entities.
Just days after he was sworn in as director of the FHFA, William Pulte canned 14 members of the GSEs’ boards of directors. The moves were announced in regulatory filings on Monday, March 17, without explanation.
While Pulte gave no reason for the ousters, some in the mortgage sector have wondered — many out loud — why there needs to be two companies doing essentially the same thing. With Pulte naming himself as chair of both companies, it's seen in some quarters as the first step in combing the two.
Such a move would also conform to the Trump Administration’s goal of reducing the size of the federal government. While Fannie and Freddie are not government entities per se, they are considered quasi-government agencies which issues mortgage-backed securities that are backed by the full faith and credit of Uncle Sam.
Others in the business have advocated for the GSEs release from government rule altogether. The Mortgage Bankers Association (MBA) has called for that, as long as there are some assurances that a “deep, liquid secondary market” for mortgages remain and market disruption is avoided.
The MBA believes that conservatorship “was never intended to be permanent” and that the GSEs should be released, but it “must be done right,” the group said in an early January policy statement.
Fannie Mae and Freddie Mac have been under federal conservatorship since 2008, when the financial crisis threatened their liquidty. The FHFA is their conservator, though it is seen more as their regulator than anything else.
Both Pulte and Treasury Secretary Scott Bessent have said they favor ending conservatorship but added they have no intention of rushing into any decision on the matter.
The board members at Fannie Mae who were let go were Amy Alving, Christopher Brummer, Michael Heid, Simon Johnson, Diane Lye, Diane Nordin, Chetlur Ragavan and Michael Seelig. Priscilla Almodovar, Renée Lewis Glover, Karin J. Kimbrough, Manuel Sánchez Rodríguez and Scott Stowell were left in their seats.
Besides Pulte, who is the founder of private equity firm Pulte Capital Partners and the grandson of the founder of home building giant Pulte Group, named to Fannie’s board were Clinton Jones, Christopher Stanley and Michael Stucky. Jones was general counsel at the FHFA and Stanley is a cybersecurity engineer at Elon Musk’s SpaceX and social media platform X.
At Freddie Mac, directors Kevin Chavers, Lance Drummond, Luke Hayden, Allan Merrill, Jane Prokop and Roy Swan are gone, replaced by Jones, Brandon Hamara and Ralph “Cody” Kittle. Hamara is Vice President of Land Acquisition at Tri Pointe Homes, and Kittle is a partner in RenWave Kore, an investment firm.
