The Senate on Thursday confirmed Mark Calabria as director of the Federal Housing Finance Agency, the regulator of mortgage guarantors Fannie MaeFNMA, +5.07% and Freddie Mac FMCC, +4.00% .
Calabria, who most recently served as chief economist to Vice President Mike Pence and, before that, at the libertarian think tank the Cato Institute, was confirmed by a 52-44 vote. As a senior staffer to the Senate Banking Committee under Alabama Senator Richard Shelby, Calabria helped draft the law known as the Housing and Economic Recovery Act.
HERA was passed in July 2008, as the financial and housing markets were beginning to buckle. Among other things, it ushered the two mortgage giants into government conservatorship, a status that was intended to be temporary.
More than a decade later, Fannie and Freddie are still in limbo. Many housing industry analysts and pundits, as well as legislators, think Calabria’s broad background in helping establish the housing finance system that exists today will be beneficial in taking the next steps.
“With his deep policy background and relationships in both the legislative and executive branches, we believe that Dr. Calabria is well positioned to provide strong leadership at FHFA,” said Robert Broeksmit, president of the Mortgage Bankers Association. The MBA will work with Calabria to “establish a housing finance system that protects taxpayers, allows equal access to lenders of all sizes and business models, and ensures a liquid and stable mortgage market for single-family and multifamily loans.”
On Thursday, progressive groups urged Calabria to continue supporting affordable housing goals and “ensuring equity for all credit-worthy families and lenders of every size,” as the Center for Responsible Lending put it in a statement.
Although that’s the broad sentiment among nearly every party in Washington with any interest in housing policy, the devil is still in the details when it comes to actual reforms.
“With so much at stake from both an economic opportunity and a safety and soundness objective, it’s not a job for a timid soul,” said Rob Zimmer, head of external affairs for The Community Mortgage Lenders of America. Like many in Washington, Zimmer is hoping for action on Fannie and Freddie sooner rather than later, as the economic expansion seems to be nearing an end.
Shares of Fannie and Freddie were up about 4% in afternoon trading after gaining 173% and 156%, respectively, for the year to date.
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