Biden Fires Calabria, Appoints FHFA Acting Director from Obama Years
President Joe Biden on Wednesday fired Mark Calabria, director of the Federal Housing Finance Agency, hours after a Supreme Court decision gave him the ability to name his own head of the watchdog for Fannie Mae and Freddie Mac, the nation’s two largest mortgage companies.
Biden appointed Sandra Thompson, FHFA’s deputy director since 2013 overseeing the agency’s Division of Housing Mission and Goals, as acting director to replace Calabria. The president has not yet nominated a permanent replacement for the position that requires Senate confirmation.
Biden was "moving forward today to replace the current director with an appointee who reflects the administration's values,” an administration official told Politico.
The move likely will result in more consumer-friendly decisions in setting the course for the two companies that back more than half of American’s outstanding mortgages.
For example, in the midst of the pandemic last year, as many families were refinancing their home loans to lower their monthly housing costs to weather the economic turmoil, Calabria created an extra fee averaging about $1,500 per loan as part of the Trump administration’s plan to recapitalize the two companies and return them to private ownership.
The decision enacting the new fee, announced in August and initially set to go into effect two months before the presidential election, came as Biden, who made clear he was not planning to pursue the same path, was leading in the polls to replace Trump. Calabria later moved the enactment date to Dec. 1 after lenders said they needed more time to implement the change.
Calabria has known for a year that he was likely to be fired if Biden won the election. The Supreme Court ruled in June of 2020 that the head of the Consumer Financial Protection Bureau could be replaced at will by a president because its single-director structure – identical to Calabria’s position – was unconstitutional.
Even after Biden was sworn in as president, the firing had to wait for the Supreme Court decision that came on Wednesday, which also found the government acted within its authority when it required Fannie Mae and Freddie Mac to send their profits to the Treasury in a so-called sweep after bailing them out in the midst of the financial crisis more than a decade ago.
The two mortgage giants repaid the $191 billion in federal bailouts they received, plus they sent additional funds to the Treasury in excess of $115 billion.
“I respect the Supreme Court's decision and the authority of the president to remove the Federal Housing Finance Agency director,” said Calabria, who served as Vice President Mike Pence’s chief economist for the first two years of the Trump administration and was confirmed by the Senate in April 2019 to lead the nation’s mortgage-finance regulator.