Bill Pulte emphasized his family’s successful legacy in the mortgage industry during his confirmation hearing before the Senate Committee on Banking, Housing, and Urban Development. The Trump administration’s pick to run the Federal Housing Finance Agency (FHFA) fielded questions about his plans for achieving his top priority, if confirmed – “to strengthen and safeguard the housing finance system.”

Among the major policy matters discussed during the hearing were the potential end to the long-running conservatorship of the government-sponsored enterprises (GSEs) and the FHFA’s policy recommendations following a comprehensive review of the Federal Home Loan Banks (FHLBanks). Pulte was light on details with respect to many of his plans, stating multiple times that he felt he needed to examine matters more closely before making definitive policy decisions.

In his opening remarks, Pulte recalled his experience managing his family’s namesake business, Pulte Homes, through the 2008 financial crisis. He asserted that, as a mortgage industry veteran, he is a highly appropriate pick to ensure the FHFA effectively utilizes funds appropriated by Congress to benefit the housing market. He also noted his philanthropic work to reduce blight in Detroit, saying he would use this experience to inform his priorities for revitalization initiatives at the FHFA.

“FHFA plays a critical role in ensuring the safety and soundness of America’s housing finance system,” Pulte said. “If confirmed, I will work to eliminate waste, fraud, and abuse wherever it exists. I will be laser focused on ensuring that Fannie Mae and Freddie Mac operate in a safe and sound manner.”

Sen. Raphael Warnock (D-Ga.) asked Pulte if he believes FHFA should continue to play a role in addressing appraisal bias. Warnock prefaced his question by noting his disappointment with U.S. Department of Housing and Urban Development (HUD) Secretary Scott Turner, who he claimed committed to fighting appraisal bias at HUD only to get rid of all HUD’s work on the matter after he was confirmed. Warnock said he was worried Pulte might do the same thing.

Pulte, once again, answered by asserting he would need to get into the office before answering for his position on combatting appraisal bias at the FHFA.

Sen. Thom Tillis (R-N.C.) pressed Pulte, as a housing business professional, about his views on the shortage of housing inventory and how that issue relates to the regulatory environment for new home construction. Specifically, he asked how the country can produce more affordable housing amid increasing regulations.

“They are almost inversely related,” Pulte responded. “Obviously, the regulations, in some ways, exist for a reason.”

He noted the variances in regulatory regimes at the state level, with Republican-leaning states like Texas having fewer regulatory restrictions than Democratic-leaning states like California, and how their approaches to affordable housing can produce different results. Pulte said he supports President Donald Trump’s views favoring less regulation and said that, if confirmed, he will do everything he can to reduce the amount of “useless regulations” while following the law.

Referring to a conversation with Pulte prior to the hearing, Sen. Mike Rounds (R-S.D.) said he was encouraged by the nominee’s support for the FHFA’s credit risk transfer (CRT) programs offered through the GSEs, which were established to reduce taxpayer risk exposure.

“I think any time you can take risk away from the taxpayers and give it to the private market is a win,” Pulte said, adding that he would look forward to working with the senator on continued efforts to examine CRT programs for ways to ensure taxpayers have the least risk exposure possible.

During her round of questioning, Sen. Catherine Cortez Masto (D-Nev.) asked Pulte about the recommendations for the FHLBank System following the FHFA’s comprehensive review of all of the institutions in the network. She indicated her support for one recommendation in which 20 percent of the FHLBank System’s revenue would be allocated to affordable housing and community development initiatives.

Pulte reiterated his stated commitment to following the law, including the statutes applicable to the FHLBanks. He added he would be happy to look into the matter once confirmed.

Some committee members asked Pulte for his views on rising home prices related to increasing insurance rates. When Sen. Tina Smith (D-Minn.) asked what he will do to help reduce insurance costs, Pulte said, “the FHFA is somewhat limited in regards to its jurisdiction” to reduce such costs. However, he added that he feels the cost of insurance is “insane” in the U.S. and “to the extent that FHFA can play any part in thoughtfully reducing insurance costs” he would be interested in exploring such possibilities with committee members.  

Regarding regulatory considerations of getting the GSEs out of conservatorship, Pulte said such an exit would have to be incredibly well planned to ensure no disruption to the marketplace and to maintain financial stability.