Ahead of Confirmation Hearing, Warren Questions FHFA Director Nominee Pulte on Fannie Mae and Freddie Mac Privatization Impacts and Potential Conflicts of Interest
“[The Federal Housing Finance Agency] needs a strong, independent leader who is committed to building a strong, stable housing market and ensuring that Fannie Mae, Freddie Mac, and the FHLBanks are helping to address, not exacerbate, our national housing crisis.”
Washington, D.C. – U.S. Senator Elizabeth Warren (D-Mass.), Ranking Member of the Senate Banking, Housing and Urban Affairs Committee, wrote to Bill Pulte, nominee for Director of the Federal Housing Finance Agency (FHFA), ahead of his nomination hearing this Thursday, pressing him to clarify his positions on key issues, including whether he supports the privatization of Fannie Mae and Freddie Mac (the Enterprises), his views on the housing supply shortage, and potential conflicts of interest due to his financial ties to PulteGroup and related entities.
In September 2008, at the height of the financial crisis, Fannie Mae and Freddie Mac experienced significant financial distress and FHFA, as their regulator, put the companies into conservatorship. As FHFA Director, Pulte would be responsible for overseeing and regulating Fannie Mae, Freddie Mac, and the Federal Home Loan Banks, which play an essential role in providing access to affordable mortgage credit across the country. In the letter, Ranking Member Warren emphasized that the future of the Enterprises, particularly the potential for their privatization, will have far-reaching implications for homeownership costs and the housing market.
“Today, FHFA continues to serve as both the regulator and conservator of [Fannie Mae and Freddie Mac]. But there are reports that President Trump intends to reprivatize them. This would be a significant undertaking that raises a number of complex questions for the housing finance system,” wrote Ranking Member Warren.
Ranking Member Warren specifically asked Pulte if he would seek to end the conservatorships, and if so, would he engage in a public input process prior to any actions to terminate them, as agreed by FHFA and the Treasury Department. This process is critical, given the broad market implications that could result from such a decision.
“If confirmed, will you seek to end the conservatorships of Fannie Mae and Freddie Mac? If you will seek an end to the conservatorships, what other parties, including other federal agencies, do you expect to be involved in discussions and decisions regarding an end of the conservatorships?” Ranking Member Warren wrote. “What will your process be for deliberating and determining the best approach to ending the conservatorship? If you will seek an end to the conservatorships, what will be your key goals for outcomes post-conservatorship?” ??Her questions continue to highlight the complexity of the situation and the importance of the Enterprises continuing their mission of expanding access to affordable housing.
In addition to these concerns, Ranking Member Warren raised concern about Mr. Pulte’s potential conflicts of interest, noting his financial ties to the housing industry, including investments in PulteGroup and other housing-related entities.
“Holdings through your investment fund, Pulte Capital Partners, as well as your other investments in PulteGroup and through the Pulte Family Office, are closely tied to the housing system and may directly relate to business that will come before FHFA,” wrote Ranking Member Warren. “To ensure that there is not an actual or apparent conflict of interest if you are confirmed, it is important that the Senate understand your current financial relationship to entities that could directly or indirectly benefit from decisions you would make as FHFA Director.”
The confirmation hearing for Pulte on Thursday, February 27, will be an opportunity for Ranking Member Warren and Senate Banking Democrats to press Pulte on these issues and ensure that his plans for the future of Fannie Mae and Freddie Mac align with the goal of reducing housing costs and expanding opportunities for American families.
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