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How Trump’s removal would impact housing finance reform

Pence has history with current FHFA director

Three weeks before the House of Representatives began an impeachment inquiry against President Donald Trump, Department of the Treasury Secretary Steven Mnuchin unveiled an ambitious plan to reform the nation’s housing finance system and privatize Fannie Mae and Freddie Mac, the companies that back about half the nation’s mortgages.

Based on information in records already released by the White House and a tally of House members, the inquiry of the president’s July phone call with the leader of Ukraine is likely to result in a vote for impeachment. The question is whether the subsequent Senate trial would result in Trump’s removal from office. It would require 67 votes in the Senate – so, assuming all 47 Democrat senators vote to remove, 20 Republican senators would have to concur.

If the House uncovers information that changes enough Senate votes to remove Trump and Vice President Mike Pence becomes the leader of the nation, what would happen to housing finance reform?

The answer to that lies in the resume of Mark Calabria, the man who currently heads the Federal Housing Finance Agency, charged with overseeing most of the reforms outlined in the so-called blueprint. Before becoming head of the agency that oversees Fannie Mae and Freddie Mac, Calabria was Pence’s chief economist for two years.

When Calabria became head of FHFA in April, Pence tweeted:

“Congrats to Dr. Mark Calabria for being confirmed as Director of the FHFA! Mark served as my Chief Economist for 2 yrs, and POTUS & I know he’ll lead FHFA with distinction to reform our housing finance system so homeownership is affordable & sustainable for American families!”

In other words, Calabria already has Pence’s backing.

“The blueprint stays in place” if Pence becomes president, said Stephen Myrow, managing partner at Beacon Policy Advisors in Washington.

The big question is: what would happen if Pence is drawn into the controversy? Trump said last week reporters should ask Pence to release details of his conversations with Ukraine, raising the possibility that his vice president was involved in the scandal.

Some saw Trump’s comment as a warning to Republicans that if they support the impeachment inquiry, they might end up with House Speaker Nancy Pelosi as president. Pelosi, D-Calif., is third in the presidential line of succession.

So far, there is no evidence Pence is implicated in the scandal, and it remains to be seen whether Democrats would seek his removal even if the inquiry revealed some involvement, particularly because of the impact it might have on voter sentiment in next year’s presidential election. The same restraint Pelosi showed that sparked the ire of leading Democrats as she resisted prior calls to impeach Trump, citing the lack of public support, might again come into play.

However, in the unlikely event of both Trump and Pence being removed from office, Pelosi would find herself in the Oval Office. A little-noticed Sept. 6 ruling by the 5th U.S. Circuit Court of Appeals said the head of the FHFA can be replaced without cause. In other words, Calabria could be out of a job if a new president wished.

If Pelosi suddenly became president, “the housing finance plan goes away,” said Beacon’s Myrow, adding he doesn’t see that as a likely outcome of the impeachment inquiry. “She probably would want to replace the head of the FHFA,” and the new court ruling would give her that ability, he said.

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