The 2024 National Settlement Services Summit featured an
exclusive interview with former Federal Housing Finance Agency (FHFA) Director
Dr. Mark Calabria, now a senior advisor at the CATO Institute, who shared his views
on the economy, the regulatory environment and the role of the federal
government with October Research Chief Knowledge Officer Mary Schuster. The
interview is available as the fifth installment of the Keys to Real Estate
Podcast – the first to be recorded in front of a live audience.
Calabria emphasized the importance of stability in the
mortgage market, something he said was his top priority during his time with
the FHFA, and oversight of Fannie Mae and Freddie Mac.
Upon joining the FHFA, Calabria said he took significant
interest in reviewing mortgage servicing activities and advocated for
prioritizing long-term stability over short-term profits. His book, Shelter
from the Storm: How a COVID Mortgage Meltdown was Averted, describes what
actions the federal government and lenders took to mitigate the potentially
catastrophic losses during the Covid-19 pandemic and the possibility that Fannie
Mae and Freddie Mac could fail.
“One of the reasons I wrote the book is Fannie and Freddie
were within a hair of failing themselves from COVID losses,” Calabria said. “When
you’re on an airplane, you put your own oxygen mask on first. And so, for me,
the mission really was we’ve got to get Fannie and Freddie in a position to be
strong for them to be able to support others.”
Calabria discussed the interplay between government policy
and the housing sector, stressing his belief in adhering to congressional
directives, with regulators acting as executors of legislative decisions rather
than pursuing their own agendas. He also described his efforts to reduce political
influence in mortgage underwriting and other operations by encouraging Fannie
Mae and Freddie Mac to function as independent entities rather than extensions
of government policy.
Calabria also offered his take on the current political
environment, including the president’s State of the Union comment on fees
facing mortgage borrowers, as well as the culture differences between the
Consumer Financial Protection Bureau (CFPB) and the FHFA.
“I think it came back because the White House was looking
for things that it can throw out there in the State of Union and talk about,
hence the whole junk fee thing. It’s important to keep in mind, there’s a very
different culture at FHFA than at CFPB,” Calabria said. “The FHFA is ….
generally even sometimes too industry friendly, certainly with originators, but
they essentially want the process to work. The CFPB is a guilty until proven
innocent [agency].”
Listen to the full interview from the session, titled “Navigating
the Politics and Policies of Now” via the Keys to Real Estate podcast episode
by the same name by following this
link.