New FHFA Director Takes Immediate Action To Halt G-Fee Increases, Announces Senior Staff Appointments

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On January 6, former Congressman Mel Watt was sworn in as director of the FHFA. Two days later, on January 8, the FHFA halted previously announced plans to increase the base guarantee fee (g-fee) for all mortgages by 10 basis points, update the up-front g-fee grid, and eliminate the up-front 25 basis point adverse market fee except in certain states. Those changes were scheduled to take effect for (i) all loans exchanged for mortgage-backed securities with settlements starting April 1, 2014, and (ii) all loans sold for cash with commitments starting March 1, 2014. The move by FHFA Director Watt formalized a promise he made shortly after being confirmed for the position to delay the g-fee changes pending further review of their impact on mortgage credit availability and Fannie Mae and Freddie Mac’s risk exposure. The delay is opposed by, among others, several Republican members of Congress, who on January 8 sent Mr. Watt a letter urging the Director to implement the g-fee changes as originally announced.

On January 10, the FHFA announced several senior staff appointments. Bob Ryan, Senior Vice President of capital markets at Wells Fargo Home Mortgage and former adviser to HUD Secretary Shaun Donovan, will serve as Special Advisor – Industry. Eric Stein will leave the Center for Responsible Lending to serve as acting chief of staff before transitioning to Special Advisor – Consumer. Mr. Stein previously served as Deputy Assistant Secretary for Consumer Protection at the Treasury Department. Mario Ugoletti, who has served as a Special Advisor to the Acting Director of the FHFA since 2009, and has been appointed Special Advisor – Agency. Finally, Megan Moore will join the FHFA as Special Advisor – Intergovernmental. She most recently served in the Treasury Department’s Office of Legislative Affairs as Deputy Assistant Secretary for Housing, Small Business and TARP.