Will Trump’s Newest Housing Official Make Big Changes to the Mortgage Market? | Global News Avenue

The new head of a lesser-known federal housing agency could lead to significant changes in mortgage lenders in the coming years.

Senate votes last week to make home construction executive William Pulte the next person in charge Federal Housing and Finance Agency (FHFA). FHFA is being established Financial Crisis of 2008 Supervise the secondary mortgage market, including supervision Minnie May and Freddy McKe.

Pulte can bring significant changes to the institution, including returning to these Government-sponsored Enterprises (GSE) to the private sector. However, privatizing the two mortgage giants could damage the housing market, experts say.

What does it mean to bring Fannie Mae and Freddie Mac privately?

Fannie Mae and Freddie Mae will not issue mortgages directly to consumers. Instead, they buy a mortgage from the bank and package it into a new investment, which is made by insurance companies, pension funds and Investment Banking.

Give them more room to lend by purchasing mortgages from banks, Fannie Mae and Freddy Mack’s balance sheets. Essentially, these two entities keep funds flowing to the mortgage, helping to maintain affordability and borrower access.

Under FHFA’s control, Menie and Freddy were supported by the federal government to cover investments backed by mortgages issued by GSES. But if privately, the government will not guarantee these investments, making them more risky and thus more expensive.

Investors may buy fewer investments in more expensive investments, sending less money back to the mortgage system and may result in higher Mortgage Rate As banks have less money to lend out housing.

Bob Broksmit, chairman and CEO of the Mortgage Bankers Association, said in support of Pert’s nomination that if the protection of Fannie Mae and Freddie Mac is to be terminated within scope, Pat Pulte will “play a key role with Congress and the Treasury, as well as the role of Congress and the Treasury, which must be in a way that avoids the cost of the market or increases.”

Pulte says he won’t prioritize privatization

Pulte said at a Senate confirmation hearing that the government should eventually end protections of Fannie Mae and Freddy.

“The exit from protection measures must be carefully planned to ensure the safety and robustness of the housing market without increasing pressure on mortgage rates,” Pulte told the Senate Banking Committee in February.

But Pulte said in an interview with CNN last week that his first priority is to root fraud on GSES, rather than privatizing them immediately.