Bill Pulte, newly installed director of the Federal Housing Finance Agency (FHFA), has begun restructuring government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac, firing 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.
Pulte was confirmed as the new director of the FHFA, regulator of Fannie Mae and Freddie Mac, last week. He runs a private equity firm and is the founder and chairman of the Detroit Blight Authority, a nonprofit that works to refurbish blighted neighborhoods. He is also the grandson of the late William Pulte, founder of Pulte Homes, which operated in Detroit in the 1950s.
Pulte’s move to restructure the GSEs comes as no surprise – he was expected to quickly start the ball rolling on bringing Fannie Mae and Freddie Mac out of conservatorship and privatize them after his confirmation.
Earlier this week, 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.
The Times further reports that employees at both Fannie Mae and Freddie Mac have been informed of an impending return-to-office policy.
In anticipation of the GSEs’ eventual transition out of conservatorship, the Community Home Lenders of America (CHLA) recently sent a letter to Pulte highlighting small lender priorities for Fannie Mae and Freddie Mac.
In the letter, the CHLA maintains that Fannie and Freddie should maintain their affordable housing footprint, including condo, investor, and second home loans – without volume caps or fee increases unrelated to risk.
The group also advocates that Fannie and Freddie strictly adhere to PSPA cash window requirements – and not arbitrarily reduce the number of seller-servicers, out of convenience or to cut costs.
CHLA also urges that Fannie and Freddie complete the process of replacing repurchase demands for performing loans with loan defects with an indemnification fee based on enterprise risk.
Fannie and Freddie should take actions to cut mortgage origination costs – e.g., rejecting bi-merge in favor of tri-merge and addressing FICO’s monopolistic credit score price hikes, CHLA says in its letter.
The CHLA says it supports the Trump Administration’s actions to create a permanent equitable cash window requirement and its interest in moving forward on a Fannie and Freddie exit from conservatorship.