Who do you like more, Fannie or Freddie?”
His hair was slicked back, his posture relaxed. His eyes were pensive, amused. Silence hung in the air and for a second, it seemed as though he might just answer. But only for a moment.
“I like them all,” Calabria said.
President Donald Trump appointed Calabria to take the helm of the FHFA on December 12, 2018. The Senate then officially confirmed Calabria in April by a vote of 52 to 44 as head of the agency.
Since then, Calabria has not been silent on his plan to reform the FHFA and the entities it oversees – Fannie Mae and Freddie Mac.
Having grown up in rural America, gone to school in suburban America and lived in urban America, Calabria brings not only professional experience from the housing industry, but also personal experience.
Calabria served as deputy assistant secretary for regulatory affairs at the Department of Housing and Urban Development during former President George W. Bush’s administration. He has also held positions at Harvard’s Joint Center for Housing Studies, the National Association of Home Builders and the National Association of Realtors.
That is the stance Calabria takes when he recalls the events of September 2008 when the economy collapsed, and former President George W. Bush took Fannie Mae and Freddie Mac into conservatorship.
Talks on GSE reform continue to heat up as many speculate an end to the conservatorship could be on the horizon.
In fact, before even taking over as head of the FHFA, Calabria posted a blog where he addressed the Mortgage Bankers Association’s plans for the future of Fannie Mae and Freddie Mac. In the blog Calabria even famously called for the end of the conservatorship.
Back in 2017, during a wide-ranging discussion about the government’s role in housing, Calabria, who was then Vice President Mike Pence’s chief economist, revealed that the Trump administration is “committed” to ending the conservatorship of the government-sponsored enterprises.
Calabria said the Trump administration is determined not to hand Fannie and Freddie in conservatorship over to the next administration, but cautioned that the process will not be easy.
“If it were easy to get GSEs out of conservatorship, it would have been done already,” Calabria said at the time.
In fact, in an interview with HousingWire, Calabria explained he preferred not to put a timeline on removing the GSEs from conservatorship.
“The exit from conservatorship is absolutely process driven, not calendar driven,” he said. “If you try to set a date with something, it just creates pressure to push stuff out that’s not ready. Fannie and Freddie are not going to leave conservatorship until they’re ready to leave conservatorship.”
“I think it’s more important to do it right than to do it right now,” he said.
Nevertheless, Calabria expressed his hope that Fannie and Freddie will be out of conservatorship or well on their way by the time his gig as director of the agency comes to an end.
“I see my role predominantly is to structure that roadmap, and then Fannie and Freddie are the ones who got to get in the car and drive it,” Calabria said, explaining that while some of the objectives that need to be accomplished to remove the GSEs from conservatorship rest on his shoulders, others are dependent on Fannie and Freddie themselves.
“Fannie and Freddie are just stuck in a box,” the director said. “They don’t control their own destiny. Part of what I want to be able to do is not give them full control but give them some influence.”
As Fannie and Freddie are given more and more control of their destiny, such as being able to raise capital, they will grow closer to exiting conservatorship.
But while some of the process will depend on actions taken by Fannie and Freddie to prepare themselves for leaving conservatorship, the FHFA also has some heavy lifting to do.
For example, over the past few years, the FHFA has exercised its enforcement by giving directives to the GSEs. Once out of conservatorship, all of these directives will fall away, former Freddie Mac CEO Donald Layton told HousingWire recently.
Calabria explained that his team is working on these directives, and is determining which ones will need to stay, and how to enforce that, and which ones will no longer be needed once the GSEs exit conservatorship.
“What are we doing under conservatorship needs to continue under different rubric – what needs to continue and what doesn’t?” Calabria said.
The process of reforming the system and releasing the GSEs could take time, but Calabria explained he has been in Washington long enough to not be discouraged by the wait. He has a realistic view of how long things can take, and will not be disheartened by bumps in the road.
“I’m here for five years, that’s my time horizon,” Calabria said. “There’s a lot to get done, but I believe if one starts now and is very methodical about it and very structured about it, that a lot can get done in five years.