Housing experts have high hopes and advice for the person set to lead the agency that regulates government-backed home mortgages.
Businessman Bill Pulte is set to meet with the Senate Banking Committee in the coming weeks for his confirmation hearing to lead the Federal Housing Finance Agency, or FHFA, that regulates Fannie Mae, Freddie Mac and Federal Home Loan Banks.
The founder of the Chicago-based private equity firm Pulte Capital Partners, Pulte has deep roots in the housing industry. His grandfather, William Pulte, launched one of the country’s largest residential development firms, now known as PulteGroup, in 1950.
Many expect the next leader of the FHFA to weigh whether to return Fannie Mae and Freddie Mac to the private sector. The federal government seized control of the mortgage finance giants nearly 17 years ago to stabilize a shaky housing market during the Great Recession. President Donald Trump talked about privatizing the companies during his first term, but it didn't happen. Some investors are betting a conversion might happen in this term; shares in the two companies have soared since the start of the year.
While a confirmation hearing date has yet to be set, leaders from across the real estate industry said they expect the confirmation to happen soon.
“He is going into the confirmation process, but he hasn’t spoken publicly about changes,” said Ryan Donovan, president and CEO of the Council of FHLBanks, at a Federal Home Loan Banks conference this week in Washington, D.C. “My guess is we’re going to see Pulte move through the nomination process. Once he’s installed, we might see some changes.”
Fannie Mae buys mortgages from banks and packages them into securities that are sold to investors. This frees banks to use the proceeds to provide more mortgages. Freddie Mac also buys mortgages and sells mortgage-backed securities. Established in 1932 to support home purchases and community growth, the Federal Home Loan Banks distributes lending options in Atlanta, Boston, Chicago, Cincinnati, Dallas, Des Moines, Indianapolis, New York, Pittsburgh, San Francisco and Topeka.
Agency leaders in D.C. have held their breath to see housing-related agendas moving forward given the closures of some federal programs across different agencies under President Trump. Just last week, Consumer Financial Protection Bureau staffers were barred from their offices.
“We haven’t seen that kind of activity as far as I know at any of the financial services regulators. I think there is a supervisory function that is critical to ensuring safety and soundness. That probably is a reason why we haven’t seen that happen. We are keeping an eye on it,” Donovan said. “Our focus is watching the confirmation process and making sure an organization knows our interests and our concerns and working with the new director" once confirmed.
Attendees said they hope to see as little disruption as possible and more collaboration across housing agencies in D.C.
“Rather than sending everybody in a regulatory agency home or firing them, take the time to reform and consider how the rules work and how government works,” said David Dworkin, president and CEO of the National Housing Conference. “This is where you can have lasting change because otherwise, you end up with a pendulum swinging back and forth, and all they have basically done is set up a scenario where it’s the other guys who rewrite all the rules. What I think we really want is to find the middle of that pendulum and stop it swinging so fast.”
Pulte’s confirmation hearing follows that of Scott Bessent for secretary of treasury and Scott Turner for secretary of the Department of Housing and Urban Development.