Fannie, Freddie Execs Led Government Meeting About Regulating Their Business

Bill Pulte leads the Federal Housing Finance Agency. (Kayla Bartkowski/Getty Images)

A government regulatory meeting this week focused on reforms to mortgage giants Fannie Mae and Freddie Mac was led at least in part by executives from those companies.

The Trump administration and Federal Housing Finance Agency Director Bill Pulte have embarked on an effort to resolve the fates of giants Fannie and Freddie, which backstop nearly $7 trillion in mortgage-backed securities and provide the backbone for the U.S. housing market. Pulte’s FHFA, which regulates Fannie and Freddie, held its first major housing-finance reform meeting this week. That meeting was led not by government employees but by representatives of the mortgage giants, prompting concerns from some participants about the companies’ influence over their regulator.

Tuesday’s meeting was held at the FHFA’s headquarters in Washington and attended by trade groups representing major mortgage lenders, bond investors, and others in the housing industry. Pulte attended by phone, but after brief introductory remarks either hung up or fell silent, leaving Freddie Mac interim Chief Executive Officer Mike Hutchins and Fannie Mae Executive Vice President John Roscoe to lead the meeting, according to people familiar with the matter.

The Fannie and Freddie executives’ questions mirrored what was asked at rival meetings held by the U.S. Treasury Department earlier in the week, the people said. Those questions generally covered how Fannie, Freddie, and the broader housing finance system should be changed.

The meeting “was led by, and organized by, US Federal Housing FHFA with questions and input from Executives,” Pulte wrote on social media after this article was published.

Fannie Mae and Freddie Mac didn’t immediately respond to a request for comment.

Pulte’s public profile in the Trump administration has risen swiftly after he spearheaded an effort to oust Federal Reserve governor Lisa Cook over allegations of mortgage fraud, which she denies. He has had a tense relationship with Treasury Secretary Scott Bessent, and according to news reports the pair almost came to blows last week at a private club. The Treasury Department is holding its own series of Fannie-Freddie reform meetings this week, and most mortgage-industry participants say they see the meetings as an attempt by the two agencies to each assert control of the reform process.

Pulte has said he would like to quickly sell a small chunk of the companies’ shares, which could raise tens of billions of dollars for the government but wouldn’t address larger questions on what to do with the companies. Under the terms of the companies’ 2008 takeover, the Treasury received warrants to acquire nearly 80% of the companies’ common shares along with a new class of “senior” preferred shares.

Some participants in the FHFA meeting on Tuesday said they found it highly unusual for Fannie and Freddie executives to essentially run their regulators’ housing-finance reform meeting. Before the government took control of the companies in 2008, the companies were lobbying powerhouses, and members of both parties had criticized lawmakers and Fannie and Freddie’s previous regulator for not trying harder to limit their market power.

“We held a GREAT meeting today at U.S. Federal Housing FHFA with the nation’s largest and most important stakeholders on HOUSING. Thank you to everyone for attending. As the future of Fannie and Freddie remains bright, we WELCOME EVERYONE IN to restore the American Dream for ALL!” Pulte said in an X post on Tuesday.

Fannie and Freddie don’t make mortgages. They buy them from lenders, wrap them into securities and provide guarantees to bond investors in case borrowers default. The process frees up cash for lenders, who are able to keep making loans, but it also means that Fannie and Freddie can essentially set the terms that much of the mortgage market uses to do business.

After the government took over the companies in 2008, the FHFA put in place restrictions that disallowed Fannie and Freddie executives from lobbying. During the first Trump administration, a House committee launched an investigation after reports that Fannie executives had lobbied the Treasury Department around Fannie-Freddie reform efforts.

The FHFA has had control of Fannie and Freddie’s boards of directors since the regulator was created in 2008, but Pulte has asserted more power than his predecessors. After ousting several of the companies’ board members, he installed himself as chair of both companies’ boards of directors.

Write to Joe Light at joe.light@barrons.com