Mortgage giants get new overseer

The U.S. Senate confirmed Mark Calabria to run the agency that oversees Fannie Mae and Freddie Mac, a potentially crucial step in President Donald Trump's recently announced call to overhaul the mortgage-finance giants.

Calabria, a libertarian economist currently working for Vice President Mike Pence, won lawmakers' approval in a 52-44 vote along party lines. He'll take the reins as Federal Housing Finance Agency director from Joseph Otting, who ran the agency on an interim basis while also serving as comptroller of the currency.

As head of the agency, Calabria will be instrumental in the Trump administration's effort to overhaul Fannie Mae and Freddie Mac, which have been under federal control since 2008. The president last month signed a memorandum that called on the Treasury Department to come up with a proposal for ending the U.S. conservatorship of the companies, and is essentially a plan to create a plan.

Fannie Mae is the Federal National Mortgage Association, and Freddie Mac is the Federal Home Loan Mortgage Corp.

Calabria, with Treasury Secretary Steven Mnuchin, could take administrative steps such as allowing Fannie Mae and Freddie Mac to rebuild their capital buffers -- a step seen as a precursor to ending government control. His ability to make bigger changes is likely to be limited in the face of change efforts being undertaken by the White House and in Congress.

"We do not expect any immediate moves by Dr. Calabria at the FHFA until after the Trump administration releases a plan for mortgage finance reform, which we expect sometime in the next six months," Keefe, Bruyette & Woods analyst Brian Gardner wrote in a note.

The process for approving Calabria was accelerated by Senate Majority Leader Mitch McConnell, R-Ky., who changed procedural rules Wednesday to speed consideration of some Trump nominees. In 2013, then-Senate Majority Leader Harry Reid, D-Nev., changed the rules to aid in the confirmation of Mel Watt, President Barack Obama's pick for director of Fannie Mae and Freddie Mac.

Calabria will take over at the agency after years of criticizing Fannie Mae and Freddie Mac from his perch at the Cato Institute, a Washington-based public policy group that says it promotes free markets and limited government.

Business on 04/05/2019

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