Ginnie Mae nominee deflects questions over GSE reform proposal
WASHINGTON — President Trump’s nominee to head Ginnie Mae appeared to distance himself Tuesday from a 2016 paper he co-wrote on reforming the housing finance system, telling senators that he “hasn’t thought about that paper in two years.”
Michael Bright, now Ginnie Mae's acting president and CEO, drafted the paper with former Federal Housing Finance Agency acting Director Ed DeMarco when both were fellows at the Milken Institute. It proposed placing Fannie Mae and Freddie Mac in receivership, and establishing Ginnie Mae, as a standalone entity separate from the Department of Housing and Urban Development, to provide a backstop for mortgage-backed securities.
But Bright told members of the Senate Banking Committee that he does not intend to advance those proposals in his position, but rather to focus on the day-to-management of the housing agency.
“I’m not in any way here to advocate for anything in that paper,” Bright said. “I’m here to run the Ginnie Mae program so that we can continue to support FHA and VA and USDA programs in as affordable a manner as possible.”
But Senate Democrats, who grilled the nominee on the lack of affordable housing goals in the DeMarco-Bright proposal, were skeptical.
“OK, well, it’s your paper,” said Sen. Bob Menendez, D-N.J.
In addition to the paper, Bright also helped write 2013 legislation — sponsored by Sens. Bob Corker, R-Tenn., and Mark Warner, D-Va. — to reform the government-sponsored enterprises as a then-aide to Corker. That bill, which failed to gain enough support to pass the Senate, would have wound down Fannie and Freddie in five years, and created a new backstop for the mortgage market modeled after the Federal Deposit Insurance Corp.
However, despite the proposals to end the current status quo of the GSEs under government control, Bright said that "aspects of conservatorship have been more durable" than people originally thought at the time the 2013 bill was drafted.
Still, Democrats expressed concern over aspects of the DeMarco-Bright paper.
“Did your proposal not rescind the affordable housing goals without requiring that the new system would serve at least as many borrowers?” said Sen. Sherrod Brown, the committee's ranking member.
Bright answered that he thought the proposal was vague on affordable housing goals, and that he didn’t “have a strong opinion on that now.”
Additionally, Bright said his proposal to make Ginnie Mae independent of HUD is no longer necessary.
“I’ve actually been surprised at how good the working relationship has been between Ginnie and HUD,” he said.
Bright says he stands by his original 2016 proposal as an intellectual matter, but that he’s more concerned now with managing Ginnie Mae.
“I still believe in what Ginnie brings to housing finance reform if and when everybody gets to it, but that’s not why I’m here,” he said.