As President-elect Donald Trump continues to make selections on who will fill his Cabinet and other key leadership positions within the administration, an outstanding question mark swirls around Ginny Mae.
The government company that oversees the mortgage-backed securities (MBS) program and its vast portfolio did not have a Senate-confirmed president for Trump’s entire first term. But Michael Bright was nominated in 2018 when he was acting president of the company.
A lengthy confirmation process ultimately led to his leaving the company in early 2019. Structured financial association. In a recent interview with HousingWireBright discusses his views on the Senate confirmation process and where the political priorities lay at the time for both major political parties.
Chris Clow/HousingWire: As someone who was involved with Ginnie Mae under the first Trump administration, how do you see the company’s leadership developing within the first 100 days of the second term?
Michael Bright: It’s so hard to predict at this stage. We don’t know yet who the HUD secretary will be, and that will be a crucial factor. In my own experience, when I went through the process, I had to interview the National Economic Council (NEC), with Secretary Ben Carson and HUD leadership. Then you continue with the Presidential Personnel Office (PPO). Currently, the PPO has not yet been set up, so many important components are still missing.
I don’t know anyone who has expressed interest or is clearly connected to the transition team, nor have I heard any specific names discussed. I hope that when they start interviewing candidates, they look for someone with a comprehensive understanding of the market.
Clow: Is there anyone in particular you’d like to see in the role?
Bright: There is a tendency to consider candidates who are primarily associated with issuers or who have a more narrow focus. I really hope they choose someone who also understands the investor’s perspective, given the importance of the MBS investment community to the functioning of FHA and USDA programs.
If I had any influence – which I don’t – I would advocate for someone who understands the role of the issuer as well as the role of the investor, because it is such a large portfolio now. That’s what I’ll pay attention to. I’m not trying to dodge the question, but without a HUD secretary or an NEC director, even if someone were interested in Ginnie Mae’s role right now, they wouldn’t know who to approach. If this was four years ago and I had my eye on that job, there would simply be no one to talk to right now.
Clow: What were the biggest impacts on Ginnie Mae during the first Trump term as a result of the lack of a Senate-confirmed president?
Bright: I was nominated, and I went through the Senate Banking Committee process, and then I was unanimously voted out of the committee by voice vote. But in 2018, the Senate still had a 30-hour rule for all nominations. So what they did was force you to spend thirty hours of debate on a nomination. What the Senate could do now is, through unanimous consent, shorten that period to just a voice vote or a package vote.
In the past – as with my predecessor Ted Tozer – most Ginnie Mae presidents generally passed the Senate with unanimous consent, unless they were highly controversial. The theory is that if you reach that nomination point, you should be qualified. They all went through one voice vote in the Senate, with very short debate time.
In 2018, Republicans pushed for federal judges as their leading candidate. They really wanted to get as many federal judges as possible. One of the tactics then-Minority Leader (Chuck) Schumer used was not to waive the 30-hour rule for anyone, deliberately backing up the trains to slow down the Trump nomination machine because they were upset about the amount of attention that there was on federal judges. I just got caught up in that.
Clow: How close did you end up getting to confirmation?
Bright: In 2019, they changed that voting threshold to three hours, which helped unblock a lot of the nominations from that first time. But for me, it was a difficult situation because when Congress ends between sessions – in 2018, going into 2019 – the whole process starts again. So you have to do everything again – redo meetings, redo the Senate confirmation hearing, redo all the background checks.
It took almost a year and I thought it would be too strange to appear on the Senate Banking Committee again. You bring your family to these nomination hearings, and it would have been awkward to show up a second time and say, ‘You met my son last year; He is now a year older.” There were just a few oddities that happened.
Clow: Were there any practical differences between the authority you had on an acting basis and the authority you would have had if you had been appointed?
Bright: There are no differences between the power of an acting president and a confirmed president. Operationally, I don’t think it had any negative impact on Ginnie Mae, especially since I had the acting authority the entire time, and hopefully the trust of the staff.
Where I think it may have had a debilitating effect was that many officials at Ginnie Mae don’t really understand the nuances of politics; it’s not their thing. Some of them felt that this meant the administration was deprioritizing Ginnie Mae or that it was not a priority for the Senate or House of Representatives. White House.
I had to do a lot of explaining that that wasn’t what was going on. What happened was a battle over federal judges and Senate speaking time, burning out the clock on nominees. The White House explicitly told me, “Since you have the acting authority, you will be at the bottom of the list,” because I was already in the seat, which was not the case with many other people. positions. It was quirky.
Clow: Were there any other internal consequences?
Bright: Operationally it wasn’t a problem, but there may have been a moral impact for some people who saw it as a message that the institution was not as important to the Senate, to HUD, or to the White House as it should have been for a $2 trillion mortgage-backed securities portfolio.
I think I should have gotten a minimum vote, so I agree with that sentiment. But I also understand that Democrats at the time weren’t going to say, “We’re angry about federal judges, but we’re going to take those concerns to Ginnie Mae.” That wasn’t going to happen. So not having a confirmed person isn’t great, but there are solutions that we’ve been able to use.
