Orion’s brokers know that most residential mortgages are processed, underwritten, funded, and sold using the policies, procedures, and guidelines created by Fannie Mae and Freddie Mac. In the last two weeks significant developments have occurred concerning the Government-Sponsored Enterprises (GSEs), Fannie Mae and Freddie Mac, and their conservator, the FHFA, and we felt that our broker clients, regardless of political leanings, should be aware of them.

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Let’s start with the leadership and structural changes. Newly appointed Federal Housing Finance Agency (FHFA) Director Bill Pulte has implemented substantial changes within the GSEs. On March 17, 2025, Pulte removed 14 board members from both Fannie Mae and Freddie Mac, appointing himself as chairman of both boards. This move consolidates his control over the GSEs and aligns with the administration’s objectives to reform these entities.

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Following these board changes, Pulte initiated a series of staffing adjustments within the FHFA. Over 10 percent of the agency’s staff have been dismissed, so far, particularly those involved in “non-statutory” roles, including research and statistics teams. Reports suggest that Pulte plans to introduce over 20 political appointees to fill these vacancies. Additionally, FHFA employees have been directed to return to office settings, indicating a shift in workplace policies.

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At Freddie Mac, Michael T. Hutchins has been appointed as interim CEO following the termination of former CEO Diana Reid by Director Pulte. Hutchins, who has served as Freddie Mac’s president since 2020, brings extensive experience from his previous roles at UBS and Salomon Brothers.

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Orion’s brokers know that there has been a lot of talk about “privatizing” Freddie and Fannie, more specifically removing them from being in a conservatorship position. Yes, discussions regarding the privatization of Fannie Mae and Freddie Mac have gained momentum. In January 2025, federal agencies outlined a framework for the “orderly” release of these entities from conservatorship, a status they have held since the 2008 financial crisis. This proposal aims to transition the GSEs back to private control while ensuring stability in the housing finance system.

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Billionaire investor Bill Ackman has re-engaged in activist investing, leveraging his social media influence to advocate for the privatization of the GSEs. Ackman proposes a government exit strategy that could benefit shareholders, including himself, and aligns with the administration’s interest in reducing federal involvement in the housing market.

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All of these developments indicate a significant shift in the governance and strategic direction of Fannie Mae and Freddie Mac, reflecting broader efforts to reform the U.S. housing finance system.

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Brokers know that the details of any plan to release the GSEs from government control become complicated very quickly, as technocrats argue over such issues as liquidation preferences, credit risk transfer instruments, and corporate credit ratings. The result has been a quagmire and a continuation of government ownership for much longer than originally intended.

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But nearly everybody in the current Administration likes the idea of releasing the GSEs, in theory. Housing experts argue such a change, especially done in a hap hazard way, could increase mortgage rates further in an already volatile market. Yes, critics are worried about the influence that Bill Ackman has over Donald Trump and how it may impact millions of homeowners and future borrowers. Orion’s management and AEs will continue to monitor the situation over the coming months and years.

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