Several indicators suggest that Fannie Mae and Freddie Mac may be on the verge of significant job cuts or substantial program changes.
One came earlier this week when William Pulte, the newly appointed director of the Federal Housing Finance Agency, ousted 14 board members from the two government-sponsored enterprises and assumed the role of chairman for their boards – a departure from the practices of his predecessors who did not sit on the boards of these entities.
The board shake-up has raised concerns that Pulte may be preparing the ground for big changes at Fannie and Freddie, which collectively employ about 15,000 people. "You want to get rid of people on the board who might make noise. The people who are left, they trust,” Christopher Whalen, chairman of Whalen Global Advisors, told The New York Times, suggesting that the moves may be aimed at minimizing dissent.
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Christopher Stanley is among the new directors appointed by Pulte. An executive at Elon Musk's SpaceX, Stanley, is involved in Musk's efforts to downsize the federal workforce through the Department of Government Efficiency. This appointment has also sparked speculation about the future direction of Fannie and Freddie. "Sure feels like they are laying the groundwork for a DOGE-like intervention,” Jim Parrott, a mortgage finance expert and nonresident fellow at the Urban Institute, told the Times.
Pulte's actions have been making noise since his swearing-in as FHFA director. He recently posted on social media, "Make Mortgages Great Again," and appeared on a Fox News program highlighting empty offices at Fannie and Freddie – fueling concerns among employees about potential mass firings.
Fannie and Freddie have been under federal control since the 2008 financial crisis when they required a bailout due to concerns over their ability to insure mortgages against default. There is ongoing debate about releasing Fannie and Freddie from the government and restoring their status as independent, publicly traded companies. Pulte and Treasury Secretary Scott Bessent have expressed support for ending the conservatorship but have emphasized caution to avoid any decisions that might increase mortgage rates.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
