Could Trump’s transition delay the rollback of mortgage policy decisions?

While the term sheet could still be released sometime this month ahead of his departure, Valverde’s resignation will take effect on November 30, leaving almost two months before the presidential transition takes place on January 20, 2025. And this timeline will be shortened somewhat by the holiday period.

While a successor to Valverde has been named in the form of longtime Ginnie Mae vice president Gregory Keith, matters could be further complicated by the position of certain congressional leaders ahead of the inauguration.

The presidential transition

Sen. Tim Scott (R-S.C.), a Trump ally in the upper chamber, recently submitted a letter to President Joe Biden urging his administration to halt policymaking and staff appointments for the remainder of his term.

The letter was also sent to current cabinet secretaries and agency heads, such as Adrianne Todman, acting secretary of the government U.S. Department of Housing and Urban Development (HUD), and Sandra Thompson, director of the Federal Agency for Housing Financing (FHFA).

“As the ranking Republican on the Senate Banking, Housing and Urban Affairs Committee, I call on the agencies under the committee’s supervision to halt all rulemaking, including the finalization of pending or proposed regulations or guidance, and to to comply with federal retention requirements. laws and retain all agency records, documents and communications,” Scott wrote in the letter.

Scott added a “demand” that all pending nominations taking place at the agencies and overseen by the committee be withdrawn. He told Biden that he “will not vote for or advance any of the nominees proposed before the committee [the Biden] administration.”

“To ensure the Trump administration’s success, the Biden administration must halt all regulations and withdraw nominations sooner [the Senate Banking Committee]Scott added.

Federal banking regulators have already indicated that they will follow this way of thinkingPolitico reports this.

Another tangential reality that could impact the implementation or continuation of certain housing policies arises from the transition itself. As of Friday according to reports at USA Today, Trump did not sign the necessary legal documentation with the General services administration (GSA) or the White House to start the transition process. This allows for security clearances and briefings for incoming officials prior to Inauguration Day.

White House Press Secretary Karine Jean-Pierre noted in a recent press conference that the Biden administration is ready to start the process once the required documents are signed.

“We will continue to work with the Trump transition team to ensure that we get that efficient, effective transition of power,” Jean-Pierre said. “We stand ready to provide assistance and access to services and information,” which is typically outlined in the required documents, she added.

Expert perspectives

Scott Olson, executive director of the Community Home Lenders of America (CHLA), was asked about the likelihood that work like HMBS 2.0 would be held up during the transition. Olson said there could be multiple reasons why future policy decisions are being delayed — some of which are entirely justified.

“Understandably, there will be calls from Congress, and you may even see the White House — I think the Trump administration did this initially eight years ago — to temporarily freeze new regulations,” he said. “Pausing while you think about what you want to do is fine, but things always change. As a general rule, we hope the pause won’t last too long as there are things that everyone agrees need to be resolved.”

Scott’s letter could be an example of this, Olson said, but if it leads to outright inaction, then there could be a problem.

“You have to have an outlet to move forward on the things that are agreed upon,” Olson said. “We understand if you want to take a break, look at what you’re doing and see where you might want to step up a gear. But we don’t want to end up in an impasse, because there are always things that could be improved.

The HMBS program is a smaller part of the $2 trillion portfolio overseen by Ginnie Mae, but could have an outsized impact, said Michael Bright, former acting president of Ginnie Mae during the first Trump administration.

During his time at Ginnie Mae, Bright said the HMBS portfolio was very volatile and subsequently generated a lot of “noise” in the Mutual Mortgage Insurance (MMI) Fund.

“One thing global investors have become very good at is trying to get ahead of predictions about changes in FHA mortgage insurance premiums because of their impact on the rate of prepayment,” Bright said. “MIP changes are tied to the strength of the insurance fund, which itself is tied to the volatility of HECM – it plays a disproportionate role in influencing what is shown in the insurance fund.”