Bill Pulte stresses need for careful analysis before ending GSE conservatorship
The newly confirmed director of the Federal Housing Finance Agency (FHFA), Bill Pulte, said privatizing Fannie Mae and Freddie Mac isn't an immediate priority under his leadership, citing the potential impact on mortgage affordability as a critical factor.
Pulte, confirmed by the US Senate on Thursday in a 56-43 vote, said that removing the mortgage giants from government control requires careful consideration.
“Fannie and Freddie shouldn’t be in conservatorship forever,” he said in an interview with CNN. “But it’s critical to ensure any discussion about exiting conservatorship needs not only to ensure safety and soundness but how it would affect mortgage rates.”
The mortgage industry has closely watched efforts to end government oversight of Fannie Mae and Freddie Mac, which have been in federal conservatorship since the 2008 financial crisis.
Read next: Could Trump really end the conservatorship of Fannie and Freddie?
Mortgage industry groups reacted positively to Pulte’s cautious stance.
“MBA congratulates William Pulte on his confirmation to serve as the next FHFA director and applauds Senate leadership for its swift action in scheduling his confirmation vote,” said Bob Broeksmit, president and CEO of the Mortgage Bankers Association. “Our members stand ready to work with director Pulte and his team, Fannie Mae and Freddie Mac staff, the Federal Home Loan Banks, and other industry stakeholders to increase affordable and sustainable homeownership and rental housing opportunities for all....”
US Mortgage Insurers (USMI) president Seth Appleton highlighted the importance of private market involvement under Pulte's leadership.
“USMI strongly agrees with director Pulte’s statement in his nomination hearing that taking risk away from the taxpayers and giving it to the private market is a win and USMI and its members look forward to working with director Pulte and his team at FHFA to accomplish that goal while also prudently ensuring access to sustainable mortgage credit for first-time homebuyers,” Appleton said.
According to the group, private mortgage insurers currently provide protection for $1.4 trillion in outstanding mortgages from Fannie Mae and Freddie Mac and have paid out nearly $60 billion in claims since the two mortgage giants entered conservatorship after the 2008 financial crisis.
The American Land Title Association (ALTA) also welcomed Pulte’s appointment. ALTA CEO Diane Tomb emphasized the critical role title insurance plays in maintaining market stability.
"As the FHFA takes steps to address the housing shortage, it is essential to remember that title insurance and the work of title professionals secure the integrity of every real estate transaction in America,” Tomb said. “It protects property rights, reduces risk and ensures confidence in homeownership."
Pulte’s appointment comes at a challenging time for the US housing market. Homebuyers continue to face historically high prices, elevated borrowing costs, and a supply shortage. The average rate for a 30-year fixed mortgage stood at 6.65% as of last week, according to Freddie Mac.
During the previous Trump administration, efforts to privatize Fannie Mae and Freddie Mac were unsuccessful. Analysts have cautioned that similar moves could lead to increased borrowing costs, making it harder for Americans to afford homes.
Pulte, who comes from a family background in housing and real estate development – his grandfather founded PulteGroup, one of the nation's largest homebuilders – highlighted the need for a careful approach.
He stressed that privatization discussions would require “significant study” to fully understand their potential effects on mortgage rates.
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