Bill Pulte to Oversee Fannie and Freddie Again, But Fixing Them Hasn't Gotten Any Easier -- Barrons.com

By Joe Light

Fannie Mae and Freddie Mac are getting their regulator back, as Bill Pulte wraps up his tenure as President Donald Trump's acting director of national intelligence. The Senate on Tuesday evening is expected to confirm top federal prosecutor Jay Clayton as the next intelligence director.

Pulte has served as acting director of national intelligence for about a month following the resignation of Tulsi Gabbard. Once Clayton is sworn in, Pulte will head back to the Federal Housing Finance Agency, which controls Fannie and Freddie.

The move could renew hopes among some investors that the agency and U.S. Treasury Department can make progress on what to do about the mortgage-finance giants, but changing the status quo is only getting harder.

The government has controlled Fannie and Freddie since the 2008 financial crisis. It owns warrants to acquire nearly 80% of the companies' common shares as well as hundreds of billions of dollars in "senior" preferred shares.

Investors have lobbied the White House to restructure the companies in a way that would let them see the companies' profits again. In the past, Pulte has floated selling a small slug of the government's ownership stake, while emphasizing that Trump would make the final call.

The FHFA and White House did not respond to requests for comment.

The challenges to doing anything significant with the companies are still the same, and, if anything, the quandary has gotten even more difficult since Pulte began his DNI stint.

The first reason is mortgage rates. Since Pulte took over the intelligence post, the average rate on a 30-year fixed-rate mortgage has risen about 0.1 percentage point to 6.58%, according to Freddie Mac. That's been driven by higher Treasury yields and energy-related inflation fears amid the war in Iran. Mortgage bond investors have said that a change to Fannie and Freddie's status could raise rates even higher, and the White House would likely not want to do anything that could be seen as hurting affordability ahead of the November midterm elections.

The second is personnel. Even as Pulte returns, another official with expertise in the mortgage giants just left the Treasury Department. Jonathan McKernan, the Treasury's under secretary for domestic finance, left the department last week. He had served during the first Trump administration as a senior counsel for policy at FHFA and helped lead efforts to figure out what to do with Fannie and Freddie for the Treasury during this one.

"Full recap-and-release would require someone with McKernan's expertise to zealously take on the project, in addition to President Trump making it a priority, neither of which appears to be the case at this point," wrote analysts for Beacon Policy Advisors in a research note this month.

For most of the past year, it seems that Trump officials have homed in on moves that are a far cry from recapitalizing the companies and releasing them from government control. Trump and Pulte have raised the possibility of selling a small slice of the companies. U.S. Commerce Department Secretary Howard Lutnick, who has also been involved in the discussions, has said that one goal of a small share offering would be to show Americans how valuable the companies are.

Trump himself in May said he didn't know what he would do. Since he controls both the FHFA and Treasury Department, he likely wouldn't need Congress to sign off on a share offering if he decided to move forward with one.

There's still time for the White House to pull off some kind of offering, and a new window to act could come after the November elections. If Republicans lose unified control of Congress, limiting their ability to pass legislation, Trump might take another look at the menu of major moves he can make without needing the help of lawmakers -- and Fannie and Freddie's fate is a topic over which he has complete control.

But history shows that doing nothing is by far the easiest choice when it comes to Fannie and Freddie. It's hard to bet against that inertia.

Write to Joe Light at joe.light@barrons.com

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July 28, 2026 12:29 ET (16:29 GMT)