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It won’t be Federal Housing Finance Administration (FHFA) Director Bill Pulte or Treasury Secretary Scott Bessent making the decision about removing Fannie Mae and Freddie Mac from conservatorship.
That’s entirely up to President Trump, Pulte told Mortgage Bankers Association Chair Laura Escobar in a freewheeling conversation at the MBA Secondary Mortgage Marketing conference in New York on Monday.
But before Trump even broaches the question, Pulte wants Fannie and Freddie to lose weight. Pulte described needless layers of bureaucracy and paperwork that has raised the cost of housing and made Fannie Mae and Freddie Mac “obese.”
“Our first mission is how do we get this from being a bloated enterprise? Get it on the treadmill, get it running efficiently,” he said. “Because an efficient, well-run Fannie and Freddie is a safe and sound mortgage market, and that includes making sure that people can afford it.”
As an example of the waste, Pulte said he found $100 million in savings at Fannie Mae at lunch.
He also shared why he reshuffled the boards of the GSEs and removed several people from leadership roles.
“A lot of people don’t understand necessarily why we did what we did with the boards. We did what we did because, amongst other things, we found a lot of multifamily fraud, which was very disappointing,” he said. “But the other thing was that there was no real distinct, the boards do not have a fiduciary duty to the company. They have a fiduciary duty to the conservatory, and that’s a very big difference. And so what I wanted to do was get rid of this latency, because it was quarters or years.”
Working with the industry, priorities
For too long, the housing industry hasn’t had a seat at the table of the presidential administrations, Pulte told Escobar. They do now, he said, and added that President Trump “is a builder” who is laser-focused on housing issues, but not perpetuating cycles of government inefficiency.
“If it’s not in the law, in the statute, we’re not doing it,” he said.
Asked about ways the FHFA could boost housing supply to make housing more affordable, Pulte said the federal government’s role would be largely focused on deregulation. (Pulte has already terminated several Biden-era initiatives, such as UDAP and special purpose credit programs.)
“I wish I could tell you that we could do more than the federal level, but a lot of it is just getting the hell out of the way,” he said.
Title, MI and credit scores
Pulte said the administration will be working on how to better support manufactured housing in America. He also noted that the FHFA will be looking at title insurance and mortgage insurance to achieve greater cost savings for borrowers.
Asked by an audience member about his predecessor’s push to change from a tri-merge credit score to a bi-merge credit score in the underwriting process, Pulte said they’re actively looking at getting it done. “I think FICO should make sure they’re being as economical as possible. We’re actively looking at getting it done. I don’t like some things I’ve heard in terms of the cost,” he said. “I had the title lobby in as well and I said to them, ‘Look, I think you guys have got to be super smart. Americans are upset about what happened over the last four years.’”
Pulte also said he would be looking at a name change for the FHFA — he’s calling it US Federal Housing – FHFA. “It’s literally saying what the name is. And so at some point you’ll probably see us drop the FHFA off [and] just call it US federal housing. And ironically, in some legal paperwork there, they refer to it as US Federal Housing.”
