President Joe Biden has fired the head of the Federal Housing Finance Agency after the Supreme Court handed him the power to do so on Wednesday.
Director Mark Calabria’s firing will be effective at 6 p.m. on Wednesday, the Washington Examiner has learned. Calabria, a staunch free-market advocate, was appointed by President Donald Trump to lead the FHFA in 2019.
The FHFA is the federal agency responsible for managing the Federal Home Loan Mortgage Corporation, also known as Freddie Mac, and the Federal National Mortgage Association, also known as Fannie Mae — meaning it has far-reaching power over mortgage markets.
“It is critical that the agency implement the Administration’s housing policies,” a White House official told the Washington Examiner, adding that as a result of the decision, Biden will replace Calabria with “an appointee who reflects the Administration’s values.”
The court’s 7-2 decision affirmed a lower court ruling that the FHFA leadership structure, which was created in 2008 with a single director who was fireable only for cause, was unconstitutional because it did not abide by the separation of powers doctrine.
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Calabria acknowledged that he is being replaced after Wednesday’s ruling and said that he respects the Supreme Court and Biden’s decision. The director said it has been “an honor of a lifetime” to serve in the role and touted the work that the FHFA has done during the COVID-19 pandemic.
“However, much work remains,” he said. “When the housing markets experience a significant downturn, Fannie Mae and Freddie Mac will fail at their current capital levels. I wish my successor all the best in fixing the remaining flaws of the housing finance system in order to preserve homeownership opportunities for all Americans.”
Bob Broeksmit, the president and CEO of the Mortgage Bankers Association, said after the ruling that his group anticipates that Biden will quickly choose a replacement for Calabria.
“MBA recognizes and appreciates the impact of the Supreme Court’s decision in Collins v. Yellen as FHFA plays a critical role regulating entities that ensure liquid markets for single-family and multifamily mortgages,” he said in a statement. “We expect President Biden will move quickly to appoint a successor, and we look forward to working collaboratively with the administration, FHFA, and other stakeholders to ensure those markets function well for lenders and the American consumers they serve.”
The Wednesday ruling sent shares of Freddie Mac and Fannie Mae into the gutter. Fannie Mae dropped more than 32%, and Freddie Mac plummeted more than 31% upon the news.
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The ruling was among other notable decisions coming out of the Supreme Court this week. On Monday, the high court sided with the NCAA in a college athlete compensation case, and on Wednesday, it ruled in favor of a free speech argument brought forward by a high school cheerleader. Earlier this month, it also upheld Obamacare after a legal challenge.
