Hello, LOs!
The Supreme Court (eventually) did what most people expected them to do: it ruled that the structure of the Federal Housing Finance Agency is unconstitutional, giving President Joe Biden the authority to fire Trump appointee Mark Calabria.
And he moved quickly. White House officials told Senior Mortgage Reporter Georgia Kromrei that Calabria would be out by the end of the day. Sure enough, Calabria sent a statement a few hours later noting that he respected the Supreme Court's decision and would step down.
True to form, Calabria warned that Fannie Mae and Freddie Mac will fail at their current capital levels should the housing market experience a significant downturn.
Kromrei is working on several follow-up stories, including a piece tomorrow morning on who is likely to replace the FHFA director.
"I predict that the President will ask Director Calabria to resign and will name Sandra Thompson as acting director," Kris Kully, a partner at Mayer Brown, told Kromrei. "While I am sure the White House has candidate(s) in mind, I also do not believe the administration is in a huge rush to get that person nominated/confirmed. There are other open seats within other agencies that are yet to be filled, and I think those are a higher priority. Accordingly, I imagine Ms. Thompson will act as the director for a while (likely many months at least)."
A Washington, D.C.-based compliance attorney who works with large lenders offered up another batch of names.
"I am sure they have been looking for a good role for Julia Gordon, who is a progressive housing policy person," the attorney told Kromrei. "So she would be a possibility, but she may not understand the business side of the GSEs well enough – not sure how much that last consideration would sway anyone. Ed Golding might be chosen – strongly progressive, had been the acting Federal Housing Commissioner in the Obama Admin, and had spent 20 years at Freddie – he really knows the territory and would have a more credible ability to oversee the GSEs but is demographically unfavorable."
Beyond the news about Calabria, the nation's top court also dismissed shareholders' claim that the net worth sweep is unconstitutional. It's a blow for #FannieGate folks, though one interesting thing to note is that a lower court will take up whether investors should receive any remedy, which is really what they've been hoping for all along.
That said, did you see the share prices of Fannie and Freddie? They lost more than 40% of their value immediately following the Supreme Court opinion.
LOs – buckle up, it could be a wild few weeks in the world of housing finance!
Have some thoughts on the Supreme Court ruling? Share them by anonymously emailing Georgia Kromrei at gkromrei@housingwire.com.
James Kleimann
Managing Editor, HousingWire
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