As reported in several news publications this week, President Trump is expected nominate Mark Calabria, Vice President Mike Pence’s chief economist, to run the Federal Housing Finance Agency (FHFA) after the current Director Mel Watt’s term expires in less than a month. This is consistent with rumors I have heard from insiders for several weeks.
What does this mean for the future of housing? A lot. Leading FHFA may be the single most important job in the housing economy. It’s no surprise that placing Calabria was Vice President Pence’s big ask – with a lasting impact likely much longer than any White House Chief of Staff. Once confirmed, Calabria will have a five-year term that, like his predecessor, will extend well into a new term in the White House. As an independent regulator, he can only be removed for cause.
Calabria is a libertarian economist who has endorsed eliminating the 30-year fixed-rate mortgage, which has made sustainable homeownership possible for millions of Americans. He has endorsed placing Fannie Mae and Freddie Mac into receivership without congressional action – well within his powers as conservator of the enterprises. He is also smart, thoughtful and open to fact-based arguments, with friends that span the political spectrum.
Having strong opinions in the private sector or in academia isn’t the same as having your hand on the throttle that controls once sixth of the U.S. economy. Driving up mortgage interest rates in advance of a highly probable 2020 recession makes a strong case against hiking up guarantee fees at Fannie and Freddie. Eliminating the 30-year fixed rate mortgage would also force consumers into adjustable rate mortgages during a period of inevitably rising rates, potentially causing another major foreclosure crisis. No one wants that on their watch.
One thing we do know for certain is that NHC and our members will work with whomever is confirmed to run FHFA, and we will continue to forcefully and respectfully advocate for the American Home, as we have done since 1931.
Are you an NHC member? Now is the perfect time to join or renew. Individual memberships start at only $500 for single proprietors, $1,000 for non-profits and $2,500 for for-profit companies. Higher levels of support in our Leadership Circle are also available for those who are interested in leading panels and seminars at our many convenings or participating in special Leadership Circle activities we are planning for next year.