Written By: Joel Palmer, Op-Ed Writer
Last month, the U.S. Senate confirmed the appointment of Mark A. Calabria as director of the Federal Housing Finance Agency (FHFA).
Calabria, who was nominated by President Donald Trump in December, was confirmed on a 52-44 vote. The vote went along party lines, with the 52 affirming votes coming from all Republicans and all 44 no votes coming from Democrats.
Prior to taking over FHFA, Calabria served as chief economist to Vice President Mike Pence. He has also been director of financial regulation studies at the conservative Cato Institute and spent six years on the staff of the U.S. Senate Committee on Banking, Housing and Urban Affairs.
As director of FHFA, Calabria will have significant influence on the housing finance market. Industry reform has been a major political topic, especially about ending the conservatorship of Freddie Mac and Fannie Mae.
Last month, President Trump issued a memorandum on Federal Housing Finance Reform. The memo directed the Treasury Secretary to develop a plan for administrative and legislative reforms to achieve several housing reform goals, including ending the conservatorships of the GSEs.
During his February confirmation hearing, Calabria testified that he would “carry out the clear intent of Congress” as it relates to privatizing the GSEs. He also said he would ensure the GSEs were, "well capitalized, well managed, and well regulated."
Calabria also said that an appropriate regulatory structure with sufficient capital is needed to support the agency’s affordable housing goals. “I'm very concerned about any large financial institution where we push it to take an additional risk without the appropriate regulatory structure in place,” he said.
Calabria’s successful confirmation was applauded by the mortgage and housing industries.
“His knowledge and experience will serve him well as he takes over this dynamic agency at such a critical time,” said Robert D. Broeksmit, CMB, president and CEO of the Mortgage Bankers Association (MBA). “Fannie Mae and Freddie Mac have been in conservatorship for more than a decade and, it's well past time that policymakers address the long-term future of these enterprises. As both administrative and legislative reforms move forward, it is important that the regulator and Congress support ongoing liquidity and stability, and ensure that the private market is capable of sustaining an expanded role before steps are taken to modify the GSEs' footprint.”
National Association of Realtors (NAR) President John Smaby noted Calabria’s decades of housing experience, including his time as an NAR economist.
"As he begins his tenure, we urge Director Calabria to work closely with Congress in the effort to responsibly reform the GSEs, particularly in search of policies that protect the 30-year fixed rate mortgage, secure a government guarantee and emphasize taxpayer and consumer protection,” said Smaby.
Said Jesse Van Tol, CEO of the National Community Reinvestment Coalition: “We look forward to working with Calabria in ensuring that the GSEs and any successor, or other secondary market entities, continue to have and meet robust affordable housing obligations, including strong affordable housing goals. There are a number of proposals on the table to eliminate or weaken existing affordable housing obligations and to further limit access to the affordable mortgage credit made possible by the GSEs guarantees and FHA insurance.”
About the Author
As an NAMP® Opinion Editorial Contributor, Joel Palmer is a freelance writer who spent 10 years as a business and financial reporter and another 10 years in marketing for the insurance and financial services industries. He regularly writes about the mortgage industry, as well as residential and commercial real estate, investments, and retirement income planning. He has also ghostwritten books on starting a business, marketing, and retirement income planning.