Federal Housing finance is hugely important in housing and our business.
We are we are today – leading the world in home ownership – largely due to federal housing finance policies.
Starting this week, federal housing policy now will be headed by Mark Calabria, President Trump’s pick for the job. Calabria was confirmed as head of the Federal Housing Finance Agency (FHFA) on a strictly party-line 52-44 Senate vote last Thursday (04/04). Not one Democrat voted for him. The FHFA oversees the nation’s major mortgage funding machinery, mostly through Fannie Mae and Freddie Mac. Fannie Mae and Fredie Mac owned or guaranteed about half of the U.S.’s $12 trillion mortgage market as recently as 2008. At that time they were taken over by FHFA during the financial meltdown.
America’s homeownership rate achieved record-high of 67.7% in the third quarter of 2000. A total of 71.6 million American families owned their homes. This is more than at any time in American history.
Fannie and Freddie are the last unresolved major issues from the crisis. How they end up will largely decide how our housing markets end up.
Calabria has urged eliminating FHFA and government support for the 30-year fixed-rate mortgage.
He has advocating requiring banks to keep more mortgages they originate on their books.
He shifted those positions in his February nomination hearing. “It is indeed possible for us to have a well-capitalized, strong system preserves the 30-year mortgage,” he testified for the Senate banking panel.
Previously, he wrote on housing regulation for the Cato Institute, a libertarian D.C. “think tank” founded by the Koch Foundation. He’s frequently been in the media, on show’s like CNBC’s former “Kudlow Report.” Since February 9, 2017, Calabria has been Vice President Mike Pence’s chief economist. Whatever this is (who knew a VP had a “chief” “economist;” how many economists do VPs have anyway?).
He was a lifetime beneficiary of the renowned “revolving door” between government and lobbying work. This included a stint as a senior staffer to the Senate Banking Committee for Sen. Richard Shelby (R – AL). While there, at the onset of the financial meltdown, Calabria helped write a July, 2008 law known as the Housing and Economic Recovery Act (HERA). Among other things, it ushered, Fannie Mae and Freddie Mac, the two mortgage giants, into government “conservatorship,” a status that was intended to be temporary.
Since February 9, 2017, Calabria has been Vice President Mike Pence’s chief economist, whatever that is (who knew a VP had a “chief” “economist,” let alone enough economists on the payroll to even need a “chief economist”).
NAR (the National Association of Realtors) and the MBA (Mortgage Bankers Association) both publicly backed Calabria’s nomination.