Move Fast and Break the Mortgage Market
The chief regulator for Fannie Mae and Freddie Mac is now also the board chair of both companies. What’s the long game here?
by David Dayen
March 20, 2025
This week, the Donald Trump–appointed chief regulator for the two quasi-governmental companies that own or control about half of the residential housing market anointed himself the board chair of both those companies. This maneuver could signal a host of shenanigans: the culmination of a 17-year hedge fund get-rich-quick scheme, a balance-sheet fiction to justify tax cuts, a new favor factory for apartment developers with ties to the president, a data transfer so Elon Musk’s everything app can learn how to sell mortgages, or something equally problematic.
But what gives former board members, market observers, and officials at the regulator greater concern is the distinct possibility that mucking around with the $7.7 trillion secondary mortgage market could lead to breaking it.
If that happens, homebuyers may not be able to get mortgages, homebuilders may be reluctant to break ground, and uncertainty would abound in a market that has brought down the economy on more than one occasion in U.S. history, most recently in 2008. “It could freeze sales, freeze refinances, stop people from forming households, cause people to be afraid of moving, freeze up developers of housing and the secondary market,” said David Reiss, a professor at Cornell Law School.
On Monday, according to securities filings, Bill Pulte, the new director of the Federal Housing Finance Agency (FHFA), appointed himself chair of both Fannie Mae and Freddie Mac, known as the government-sponsored enterprises, or GSEs. Pulte came from a family business that is now the third-largest homebuilder in the country, but he left that behind to run a private equity firm, and became renowned as a meme-stock impresario, hyping companies like GameStop or Bed Bath & Beyond to retail investors.
https://prospect.org/power/2025-03-20-move-fast-break-mortgage-market-fannie-freddie/