The newly minted head of the Federal Housing Finance Agency didn't waste time shaking things up at the Federal National Mortgage Association.
Agency Director Bill Pulte, who named himself chairman of the board of the mortgage finance organization more widely known as Fannie Mae, as well as the Federal Home Loan Mortgage Corp. on Monday, removed eight Fannie Mae board members in a regulatory filing that same day: Amy Alving, Chris Brummer, Michael Heid, Simon Johnson, Diane Lye, Diane Nordin, Chetlur Ragavan and Michael Seelig.
It was a move some view as a way for the FHFA to heighten its oversight of the mortgage finance giants, install like-minded directors, and usher in budget and staffing cuts.
Pulte's new role comes six days after his Senate confirmation to lead the FHFA. He also appointed agency general counsel Clinton Jones to the board, as well as Christopher Stanley, a cybersecurity engineer at SpaceX. Stanley, who also has a role in the Department of Government Efficiency, resigned abruptly yesterday from the Fannie Mae board. The remaining board members are Priscilla Almodovar, Renee Glover, Karin Kimbrough, Manolo Sanchez Rodriguez and Scott Stowell.
The government has overseen Fannie Mae and Freddie Mac since the 2008 mortgage crisis amid concerns over the organizations' financial stability. President Donald Trump has said he wants to release them from conservatorship and make them private.
Launched in 1938, Fannie Mae purchases mortgages from banks and sells them to investors as securities. Banks then use the finance to provide more mortgages.
“It’s consistent in terms of everything happening in Washington,” said Dennis Eisinger, an adjunct professor at the University of Florida’s School of Law, in an interview. “Whether it’s the Department of Justice, FBI or gutting the Education Department, they are doing it willy-nilly. Fannie Mae and Freddie Mac are probably the next group of people.”
The Trump administration and Musk's DOGE aim to reduce the national debt in part by slimming the federal workforce. News reports and industry experts say cuts at Fannie Mae and Freddie Mac are expected.
“I can’t say for sure there will be negative ramifications,” Eisinger said, “but this whole idea of government is deregulation and saving money, so there could be cutbacks on personnel and policy changes, which could potentially affect the issuance of residential loans.”
Trump and Pulte have argued that conservatorship wasn't intended to last forever and that privatizing means they would be run more efficiently and help steer more money to industry.