Fannie Mae and Freddie Mac’s chief regulator is calling on Congress to pass housing-finance reform legislation that sets a path to return the companies to private hands.

Lawmakers should pursue measures that reduce taxpayer risk, promote competition and support sustainable home-ownership, Federal Housing Finance Agency Director Mark Calabria wrote in a letter accompanying his first annual report to Congress.

“Reform remains overdue, despite prior efforts, and we should view this task with some urgency,” Calabria wrote in the letter dated June 11. “I encourage Congress to pursue legislation to move our country toward a more sustainable housing finance system.”

Congress has failed in repeated efforts to deal with Fannie and Freddie, which have been under U.S. conservatorship since they were seized by regulators as the mortgage market collapsed in 2008. Calabria, a Republican appointee who took office two months ago, is urging lawmakers — including the Democrat-run House — to work with him and the Trump administration at a time when there is little bipartisan cooperation in Washington.

Calabria wants Congress to empower FHFA to charter new competitors to Fannie and Freddie, something conservative lawmakers have championed. He’s also seeking expanded oversight authority over firms that support the housing market, including nonbank mortgage servicers, citing similar powers granted to agencies such as the Federal Deposit Insurance Corp.

The Libertarian economist, who formerly worked for Vice President Mike Pence, said he will do whatever he can within his existing authority to bolster the housing finance system. He’s previously said that Fannie and Freddie could be freed even without Congressional action.

Advertising

The recommendations in Calabria’s letter were “nothing radical” according Cowen analyst Jaret Seiberg.

“There is a window for Congress to act on these changes in concert with the administrative reforms that FHFA is undertaking to free Fannie Mae and Freddie Mac from conservatorship,” Seiberg wrote in a note Wednesday. “As such, we don’t see this as a wish list. These are changes that realistically could become law.”

Calabria’s request comes as the Treasury readies its own housing reform plan, which is expected to be completed within weeks, people familiar with the matter have said. That plan, requested by the White House earlier this year, will lay out the Trump administration’s road map to getting Fannie and Freddie out of government control.

Fannie and Freddie don’t make loans themselves, but they keep the nation’s mortgage market humming by buying mortgages from lenders and packaging them into bonds that are sold to investors with guarantees of interest and principal.

The companies, which backstop about $5 trillion of mortgage securities, got $191 billion in taxpayer money to weather the financial crisis. They have returned to profitability and paid more in dividends to Treasury than they received in bailout funds.