Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: Turning back to the Federal Reserve, sources telling us our
Speaker 2: colleagues here at Bloomberg that a driving force behind the
Speaker 2: DOJ's decision to subpoena the Central Bank is the Federal
Speaker 2: Housing Finance Agency Director Bill Pulty. Director Pulty has been
Speaker 2: busy over the last week, some purchases of MBS and
Speaker 2: Focus as well. Director Pulty, Welcome to the program, Sir.
Speaker 2: You are cited in our story this morning. Just wanted
Speaker 2: to give the opportunity to respond to it. Bill, What
Speaker 2: was your role in the developments over the weekend.
Speaker 3: The DOJ's outside of my purview. This is out of
Speaker 3: my purview. I don't know anything about it, and I
Speaker 3: would refer you to the DOJ.
Speaker 2: Bill, you haven't been shy of sharing your thoughts on
Speaker 2: the Federal Reserve before, particularly over the last twelve months.
Speaker 2: You thought that the chairman would ultimately resign. He's standing firm.
Speaker 2: Do you think this push against the Federal Reserve is
Speaker 2: actually leading to unintended consequences and leading this fed to
Speaker 2: dig in.
Speaker 3: My main focus, John has been on reducing mortgage rates
Speaker 3: to the extent that we can do it. And increasing
Speaker 3: housing affordability. President Trump announced a huge thing last week
Speaker 3: when he decided that he was going to ban institutions
Speaker 3: from buying homes. Basically, the concept is that people should
Speaker 3: be living in homes, not corporations. You know, we have
Speaker 3: a supply problem in this country, and obviously we're working
Speaker 3: on the demand side of things, because in some cases,
Speaker 3: affordability has gotten so tough that people don't even want
Speaker 3: to buy a home because of what Joe Biden did,
Speaker 3: and so we're reversing that. That's what we're focused on.
Speaker 3: We had a huge one to two punch last week.
Speaker 3: You saw mortgage rates moved twenty five bases points lower
Speaker 3: on the news that Fanny and Freddie have started to
Speaker 3: undergo a two hundred billion dollar mortgage bond buy. And
Speaker 3: I think you're going to see some very exciting things
Speaker 3: come out of Davos with regard to the President on housing.
Speaker 1: In a couple in a week.
Speaker 4: Grector POLDI, you were with the President this weekend, I believe,
Speaker 4: traveling with him on Air Force one from Washington to
Speaker 4: Palm Beach. Did you talk about the Federal Reserve with
Speaker 4: him this weekend?
Speaker 3: Obviously I would never talk about anything that the President
Speaker 3: and I talk about. I would say this that the
Speaker 3: President is late focused on housing affordability and reversing what
Speaker 3: has happened these last four years.
Speaker 1: You look at the average mortgage payment.
Speaker 3: Under Joe Biden, it's skyrocketed compared to what it was
Speaker 3: under President Trump's first term. We are focused on bringing
Speaker 3: down not only the mortgage rates, but also the day
Speaker 3: to day cost in upkeeping homes, which has to do
Speaker 3: with you know, whether it be your ongoing expenses, mortgage insurance, etc.
Speaker 1: There are so many pieces to the cost.
Speaker 3: Puzzle that at the FHFA US Federal Housing we are
Speaker 3: working to reduce the cost bird and that Americans have.
Speaker 4: I know that you've seen the report from our colleagues.
Speaker 4: I've also got calls last night about the subpoena handed
Speaker 4: to the FED and was told that you were part
Speaker 4: of it, pulling together a report that then went to
Speaker 4: the DOJ. I just wanted to go since from you.
Speaker 1: Did the President know this was coming?
Speaker 4: The Treasury Secretary know this was coming? Have you had
Speaker 4: any of these conversations again.
Speaker 3: On that matter, I'd refer you to the Department of Justice.
Speaker 4: Okay, well, we'll wait to your the Department of Justice.
Speaker 4: When it goes back to the mortgage backed securities that
Speaker 4: you have been talking about, you already been purchasing about
Speaker 4: north of two hundred and thirty billion dollars of them
Speaker 4: last year. There is a cap. Do you expect to
Speaker 4: reach that cap this year?
Speaker 1: I think all options are on the table.
Speaker 3: President Trump is a president who keeps all options on
Speaker 3: the table. We announced this historic two hundred billion dollars
Speaker 3: buyback of mortgage bonds. This is a huge deal, and
Speaker 3: you know, we'll keep all options on the table. Look,
Speaker 3: we're doing our part of Fanny and Freddy. Most presidents
Speaker 3: didn't even know Fanny and Freddie existed. Obviously, your community
Speaker 3: in Bloomberg and all of us in the private sector
Speaker 3: we know the importance of Fanny and Freddy. But for
Speaker 3: the average day American, they don't understand because the presidents.
Speaker 1: Haven't made it a priority.
Speaker 3: Average Americans haven't understood that presidents had this authority until
Speaker 3: President Trump found this authority, which is basically to utilize
Speaker 3: these companies to be companies. Imagine that get people to
Speaker 3: show up back to work. You know, we had sixteen
Speaker 3: thousand people. We have sixteen thousand people at the two companies.
Speaker 3: When I showed up on the scene and President Trump
Speaker 3: came into office, they were all working from home. We'd
Speaker 3: go to these big buildings, air conditioning, spewing everywhere, spending
Speaker 3: fifty million dollars a year on leases.
Speaker 1: Nobody was in these buildings. So we have turned around
Speaker 1: Fanny and Freddy.
Speaker 3: They try to get President Trump to sell the companies,
Speaker 3: for the two companies together for one hundred billion dollars.
Speaker 3: I think the valuation of the companies is anywhere between
Speaker 3: five hundred billion and some say up to a trillion dollars.
Speaker 5: A lot of people are hoping that there is some
Speaker 5: sort of initial public offering o those companies. Are you
Speaker 5: preparing them for that at some point later this year
Speaker 5: or next year.
Speaker 3: We are fully prepared to do whatever the President would
Speaker 3: like us to do on that matter.
Speaker 1: We have been getting prepared.
Speaker 3: We are prepared, just like we are with the institutional
Speaker 3: home buying ban, just like we are with home builders.
Speaker 3: We have a full set of things to do, and
Speaker 3: once the President decides what to do, we go about
Speaker 3: executing them.
Speaker 5: Director Pulti, a lot of people on Wall Street, we're
Speaker 5: pretty excited actually about your purchases of MBS some mortgage
Speaker 5: backed securities and saying that this shoulds like it should
Speaker 5: be something that would bring down spreads. They were less
Speaker 5: excited about the idea of preventing institutions from buying single
Speaker 5: family homes, saying that it really do wasn't based in economics,
Speaker 5: considering that in certain regions in the country there's actually
Speaker 5: a glut of houses that this is not because of
Speaker 5: institutions that account for a relatively small portion of overall buyers.
Speaker 1: What do you say back.
Speaker 5: About the economic fundamentals behind this type of proposal and
Speaker 5: why it would bring down fordability and.
Speaker 1: Increase the supply of houses.
Speaker 5: Which is the ultimate issue that a lot of people.
Speaker 3: Say, Well, it just makes economic sense. You talk about supply,
Speaker 3: I mean, you kind of gave me a narrative there,
Speaker 3: But if you look at the economic supply of things,
Speaker 3: the fact is you have you know, big corporations buying
Speaker 3: using long term paper, using their balance sheets to scoop
Speaker 3: up homes in a supply shortage as we call it,
Speaker 3: and they're in some cases buying these homes for twenty
Speaker 3: thirty forty percent less than Americans are doing it. You know,
Speaker 3: President Trump was elected with a very very popular mandate.
Speaker 3: You know, sometimes people don't remember because it was a
Speaker 3: year ago, but it was a landslide victory, and he
Speaker 3: was given a mandate to reverse these last four years
Speaker 3: of crazy inflation that happened under Joe Biden. And so
Speaker 3: I think it's very appropriate that we're doing everything that
Speaker 3: we can to reduce housing costs, and we're going to
Speaker 3: keep doing it, whether it's the institutional ban on buying,
Speaker 3: looking at all of the things that go into a
Speaker 3: home and owning a home. Americans need to own homes
Speaker 3: in this country, and we're committed to restoring that.
Speaker 5: Director Poulty, did you study this in terms of this
Speaker 5: apply demand dynamic and whether it actually would reduce the
Speaker 5: cost of houses for individuals? Should there be a ban
Speaker 5: on single family housing, on institutions buying single family homes?
Speaker 5: Because a lot of people in the markets who have
Speaker 5: supported President Trump's policies and thinking of Neil data in particular,
Speaker 5: came out and said this is faulty economics.
Speaker 3: Well, of course I've studied it. I've studied it my
Speaker 3: whole life. I mean, I grew up in the housing business.
Speaker 3: I grew up in the building business. I was on
Speaker 3: the board of Poulty homes for four years. I understand
Speaker 3: what institutional buying does. It's very powerful. I understand why
Speaker 3: Wall Street might not like it. But we serve the
Speaker 3: American people. We don't serve Wall Street. And President Trump
Speaker 3: is laser focused on doing the right thing, no matter
Speaker 3: who it affects in terms of their pocketbooks. At the
Speaker 3: Wall Street level, he has focused, laser focused on action,
Speaker 3: not talk like so many of these Democrats, like Elizabeth Warren.
Speaker 3: You know, for years she would talk about all institutional buying.
Speaker 3: She didn't do anything. Joe Biden didn't do anything about it.
Speaker 3: President Trump is doing something about it.
Speaker 4: Elizabeth Warren wanted to see an effort like this. Do
Speaker 4: you think the President is taking cues from some of
Speaker 4: the more populist wings of the Democratic Party.
Speaker 3: No, I think Elizabeth Warren is going to have to
Speaker 3: take cues from us or she's going to continue to
Speaker 3: look like a fraud because she says all these things
Speaker 3: and then she does nothing about it.
Speaker 1: You know, President Trump, he gets things done.
Speaker 3: He said, look, we're going to ban institutional buying, and
Speaker 3: then we're going about both on an executive action front
Speaker 3: as well as codifying it in legislation. I mean the
Speaker 3: amount of momentum that we've had at the legislative level
Speaker 3: from you know, different Congress people. I was at the
Speaker 3: Financial Services Committee the other night.
Speaker 1: People were ecstatic about this.
Speaker 3: I also talked with multiple US Senators, many who are
Speaker 3: vying to sponsor the legislation. So this is a very
Speaker 3: big deal and I think it's going to happen.
Speaker 4: Is the President going to declare a housing emergency in
Speaker 4: the United States.
Speaker 3: That's entirely up to the President. I can tell you this.
Speaker 3: He is treating it with great urgency. He understands real
Speaker 3: estate very well. He understands the importance of keeping home
Speaker 3: prices up. He understands this issue very well. And we're
Speaker 3: working very well together, Secretary Turner, Secretary Bessett, Secretary Lutnik,
Speaker 3: the Vice President, Susie Wiles. This is an all hands effort,
Speaker 3: James Blair in the White House. I mean, this is
Speaker 3: an all hands effort to reduce the cost of home
Speaker 3: ownership and get people, not corporations, back in homes.
Speaker 2: We look forward to saying what comes in that effort.
Speaker 2: I right to Poty, we appreciate your time this morning,
Speaker 2: said thank you very much. The Federal Housing time right
Speaker 2: to Bill POLTI are the federals kind of, but much
Speaker 2: more on what's going to happen with housing in this country.