September 6, 2018, marks the 10-year anniversary of the Federal conservatorship of Fannie Mae and Freddie Mac. By the beginning of next year, the Trump administration is likely to become the dominant force overseeing the entire nation’s housing finance infrastructure.
And here’s how.
For one, Congress underneath the Obama Administration lacked political will to try to effort any reform in our space. This is not a problem with the Trump administration.
When Mel Watt, the director of the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, finishes his term (or is forced out sooner) in January, President Trump can nominate his replacement.
Plus, the leader of Fannie Mae, Tim Mayopoulos, will be leaving at the end of the year. And now, Freddie Mac’s CEO Donald Layton has confirmed he'll be stepping down next year.
This gives the current administration a much larger scope to dictate the terms of housing reform. And what would such reform look like?
As we’ve covered in HousingWire, Trump expects wide-ranging housing reform in the near future. As for the government-sponsored enterprises, the administration is against continuing the outsized role they played in the country’s mortgage finance system and favors much more competition in the mortgage market.
And while it may be argued that picking the replacement to Watt would be enough, it certainly doesn’t hurt that Fannie and Freddie look to be getting new leadership.
Layton and Mayopoulos were both kind enough to call me several times per year during their reigns. We never spoke about politics and both affirmed they operate fully under the auspices of the FHFA.
But upon closer look, as in my HousingWire magazine profile (paywall) of Mayopoulos, there is a great deal of change each affects at their firms.
If there is finally a president willing to take housing reform seriously, as I believe the current president is, then having the ear of everyone in charge will put Trump in the strongest position ever to leave a lasting mark on housing finance.