The director of the FHFA, Mark Calabria, who was appointed by President Donald J. Trump was fired by Joe Biden Wednesday June 23rd after the Supreme Court Ruled that Congress made the FHFA too insulated from the White House because the president couldn’t easily remove a director whose policies were contrary to his own.
The Trump administration called for putting Fannie and Freddie on a more stable financial footing by returning them to private hands after imposing new limits on their business activities and raising the fees they charge lenders.
“When the housing markets experience a significant downturn, Fannie Mae and Freddie Mac will fail at their current capital levels,” Calabria said. “I wish my successor all the best in fixing the remaining flaws of the housing finance system in order to preserve homeownership opportunities for all Americans.”
Biden quickly appointed Sandra Thompson, who was most recently the deputy director of the FHFA’s Division of Housing and Mission Goals, has been at the agency since 2013.
Privatization will not be on the table in the Biden administration. Instead, these are some of the things possibly on the table for the new agenda of the FHFA:
- Increase production caps. Calabria set hard limits on Fannie and Freddie’s loan volume at $70 billion apiece, but that can be increased by the next FHFA director. Basically allowing more loan capacity for Fannie and Freddie
- Increase production of loans with an affordable component. Perhaps similar to the FannieMae Refi now – check out our video on YouTube and facebook for that
- Another strategy to increase affordable housing loans would be to change the formula for qualifying in high-income areas. such as New York City and San Francisco. Increasing the threshold of median income.
- Increase the number of correspondents that originate for Fannie and Freddie in order to expand participation by smaller lenders. Bringing in smaller lenders to the programs would increase participation among less well-heeled property owners.
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