Bill Pulte, director of the Federal Housing Finance Agency (FHFA), on Tuesday rescinded a series of advisory bulletins and directives implemented by the Biden administration.
The most impactful of the changes was an order terminating special purpose credit programs (SPCPs), which are designed to help economically or socially disadvantaged groups to attain homeownership by allowing lenders to offer certain credit flexibilities, such as special pricing for certain loans. These programs, created through the Equal Credit Opportunity Act, allow lenders to approve first-time homebuyers with lower down payments and credit scores.
Pulte also rescinded an advisory bulletin charging the FHFA with enforcement the unfair and deceptive acts or practices (UDAP) regulations.
Pulte announced these changes, and several others, through a series of posts on X – they are not, as of this posting, available on the FHFA’s website.
Separately, Pulte says he will not lower the FHFA’s conforming loan limit, which now stands at $806,500 – an increase of $39,950, or 5.2%, from 2024.
“There are no plans to do anything as it relates to the conforming loan limit,” Pulte was quoted as saying in a CNBC report on Tuesday.
Mortgage industry trade groups reacted swiftly to the broad set of rule changes.
With regard to the FHFA’s end of the enforcement of UDAP, Bob Broeksmit, CMB, president and CEO of the Mortgage Bankers Association (MBA), says his group “supports the rescission of this advisory bulletin and thanks Director Pulte for prioritizing this issue in response to our members’ concerns, which we raised at the time of the policy’s release in November and reiterated to the director immediately upon his confirmation.”
“The November bulletin’s specific expectations for Fannie Mae and Freddie Mac (the GSEs) to conduct consumer protection oversight of their customers wrongly established the GSEs as compliance regulators was duplicative of federal and state regulatory oversight of UDAPs, and would have negatively impacted consumers and lenders through higher costs,” Broeksmit says in a statement. “Common sense regulation and oversight is crucial to ensuring that the GSEs operate in a safe and sound manner that allows them to continue their pivotal role in providing affordable homeownership and rental housing opportunities for all Americans.”
As was expected, Pulte, who was confirmed as the new director of the FHFA, regulator of Fannie Mae and Freddie Mac, earlier this month, has already begun restructuring the GSEs: Last week he fired Diana Reid, CEO of Freddie Mac, as well as placing Gina Cross, chief operating officer, and Monica Matthews, director of human resources, and other staffers on leave, Politico reports.
And, just days after he was confirmed, Pulte fired 14 members of Fannie and Freddie’s boards of directors and appointed himself chairman of each, according to the Politico report.
In addition, the FHFA has put 35 of its own unionized employees on administrative leave, according to a New York Times post.