After a Supreme Court ruling paved the way for the Biden administration to fire Federal Housing Finance Agency (FHFA) Director Mark Calabria at will, President Joe Biden took swift action.
Hours after Calabria’s resignation, the White House appointed Sandra Thompson, FHFA’s deputy director of the division of housing mission and goals, as acting director of the housing finance industry regulator.
In a statement, Thompson said she is committed to conducting the nation’s housing finance system in a “safe and sound manner,” while at the same time maintaining a “laser focus on mission and community investment.”
“There is a widespread lack of affordable housing and access to credit, especially in communities of color,” Thompson said. “It is FHFA’s duty through our regulated entities to ensure that all Americans have equal access to safe, decent, and affordable housing.”
Thompson has been at the FHFA since 2013, where she has overseen housing and regulatory policy, financial analysis research and all mission activities for Fannie Mae and Freddie Mac. Prior to that she held numerous leadership positions at the Federal Deposit Insurance Corporation, where her career spanned 23 years. She is one of three deputy directors in the line of succession if the FHFA director resigns.
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Within hours of the Supreme Court’s decision in Collins v. Yellen, a White House official told HousingWire that Biden planned to replace Calabria, a Trump appointee and vocal critic of the Government Sponsored Entities (GSEs), before the end of the day.
“FHFA has an important mission of oversight of Fannie Mae and Freddie Mac as well as the Federal Home Loan Bank System,” the White House official said. “It is critical that the agency implement the Administration’s housing policies. As a result, in light of the Supreme Court’s decision today, the President is moving forward today to replace the current Director with an appointee who reflects the Administration’s values.”
In a statement announcing his resignation, Calabria said he respected the Supreme Court’s decision and the President’s authority to remove him.
“During my tenure, FHFA has fulfilled its mission as the economy fluctuated from record-low unemployment and a strong housing market, to a pandemic-triggered recession that spared house prices but contracted supply. Through this cycle, FHFA has acted quickly and effectively to provide relief to homeowners and renters impacted by the COVID-19 pandemic, and to ensure Fannie Mae, Freddie Mac, and the Federal Home Loan Bank System operate in a safe and sound manner, all while supporting historic growth in homeownership, especially among minority households,” said Calabria.
He added that “much work remains,” and warned that Fannie Mae and Freddie Mac will fail at their current capital levels should the housing market experience a significant downturn.
“I wish my successor all the best in fixing the remaining flaws of the housing finance system in order to preserve homeownership opportunities for all Americans,” Calabria wrote.
The Biden administration has not seen eye-to-eye with Calabria on the role the GSEs play in the mortgage market. Calabria has sought to build up the entities’ capital reserves and reduce their footprint in the market.
Fannie and Freddie guarantee about half of the $11 trillion U.S. mortgage market. Upon the Supreme Court ruling, shares for the GSEs initially tumbled 40%.
Calabria had pushed to remove the companies from conservatorship, but ran out of time to do so in the twilight of the Trump administration. The Biden administration has not shown any interest in ending the arrangement.
In recent months, as exiting conservatorship appears increasingly unlikely, Fannie Mae and Freddie Mac have seen a string of high-level departures. In June, the FHFA launched a review of executive compensation at the GSEs, which is generally considered much lower than the private sector.
After the Supreme Court decision, few rose to defend Calabria, a Trump-appointee whose recent actions have drawn ire from many corners of the mortgage industry. Trade associations, housing advocate groups and Washington, D.C. insiders urged the Biden administration to replace Calabria without delay.
Mortgage Bankers Association President Bob Broeksmit said in a statement that the trade group appreciates the impact of the Supreme Court decision.
“We expect President Biden will move quickly to appoint a successor, and we look forward to working collaboratively with the administration, FHFA, and other stakeholders to ensure those markets function well for lenders and the American consumers they serve,” Broeksmit wrote on Wednesday.
Editor’s note: This story was updated on Wednesday, June 23 at 9:39 p.m. EST to include news of Sandra Thompson’s appointment as Acting Director of the FHFA.
