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Support for Thompson to permanently lead FHFA grows

Rep. Maxine Waters added her name to the list on Thursday

Influential Congresswoman Maxine Waters has waded into the growing debate about who should lead the Federal Housing Finance Agency (FHFA). And her pick – though she doesn’t get a vote – is the acting director, Sandra Thompson.

“Appointed on June 23 as acting director, Ms. Thompson has needed little time to show this nation how uniquely qualified she is to serve at the helm of FHFA,” Waters said in a statement late Thursday night. “Her understanding of Fannie Mae, Freddie Mac, and the Federal Home Loan Banks as government-sponsored enterprises (GSE) is undeniable. Her commitment to ensuring that the GSEs are both well capitalized and using their status to expand low-cost mortgage credit to all communities is illustrated in her actions. More importantly, her commitment to accountability and transparency will be invaluable to ensuring the GSEs are operating in the best interest of taxpayers.”

Waters, who chairs the powerful House Committee on Financial Services, called on President Joe Biden to make Thompson’s temporary appointment permanent. She said it’s “critical to have an FHFA Director who is committed to advancing housing affordability, expanding the dream of homeownership, and closing the racial wealth gap in this country.”

Thompson, a career staffer at the FHFA who previously worked at the FDIC for 23 years, has moved quickly to advance the White House’s housing agenda.

In the past two months, she has eliminated the adverse market refinance fee, a Trump-era initiative that tacked on 50 basis points to most refinancings. She’s also made it more difficult for multifamily lenders to evict tenants at properties finances with Fannie and Freddie mortgages; pushed for rental payment history to be included in borrower credit risk assessments; introduced new fair housing goals for the GSEs designed to boost sales to low-income homebuyers; and worked with Treasury Secretary Janet Yellen to suspend elements of the the GSEs’ preferred stock purchase agreements that critics said reduced the availability of credit and actually increased risk-taking.

On Wednesday, Thompson signed off on a rule change proposal to amend the Enterprise Regulatory Capital Framework (ERCF) for the GSEs that would refine the leverage buffer and the risk-based capital treatment for CRT transactions.

The proposed amendments “would better reflect the risks inherent in the Enterprises’ business models and encourage the Enterprises to distribute acquired credit risk to private investors rather than to buy and hold that risk,” the FHFA said this week.

Waters’ statement complicates what has been a fractious debate over who should lead the FHFA, and by extension, impact pricing and credibility like no one else in America can.

Industry insiders told HousingWire late last week that they expected Mike Calhoun, the head of the president of the Center for Responsible Lending (CRL), to be nominated to be permanent director of the agency. But Calhoun wasn’t named, and insiders told HousingWire that there was debate over whether Calhoun was a pick who would survive the political nomination process.

In his role at CRL, Calhoun has frequently been called to provide testimony before House and Senate committees and subcommittees on various aspects of banking, lending, financial reform, consumer credit and consumer protection. (Hear him as a guest on a HousingWire webinar on fair lending here.)

In 2019, speaking before the Senate Committee on Banking, Housing and Urban Affairs, Calhoun gave a lengthy statement that included his thoughts on regulating and reforming Fannie Mae and Freddie Mac. In particular, Calhoun offered support for treating the GSEs like a public utility. He has also articulated positions that seem to fit well with the Biden administration’s focus on racial equity and affordable housing.

As a career staffer, Thompson hasn’t published papers outlining specific positions on the GSEs or what an exit from conservatorship would look like.

But she is a leader, former colleagues and regulators said.

Ed DeMarco, the president of the Housing Policy Council, led the FHFA in the years following the recession, and hired Thompson in 2013. He described Thompson as a “pro’s pro.”

“[Thompson] understands how regulators should work with the business community and understands some of the tradeoffs,” said DeMarco.

Dave Stevens, the former head of the Mortgage Bankers Association and a past FHA commissioner, also lobbied for her to be nominated as permanent director.

“Thompson has effectively reversed the harmful steps taken by her predecessor in a manner that should be applauded by industry and housing policy stakeholders,” he wrote in an op-ed published in HousingWire this week. “The fact is that Thompson was able to hit the ground running because she is experienced. She has been at FHFA since 2013, reporting directly to Mel Watt and then to Mark Calabria, and knows how the agency works.”

Other potential nominees for the permanent directorship included Mark Zandi, chief economist at credit rating agency Moody’s Analytics, and Jim Parrott, a former Obama official, have in the past supported eliminating the GSEs’ affordability mandates, Politico previously reported.

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