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.