WASHINGTON – Last month, nonbank lenders were outraged over a Ginnie Mae plan to impose capital requirements. Industry observers say such a consequential policy underscored a long-held concern about the often-overlooked agency: It has lacked a permanent leader for more than four years.
The leadership void – outlasting the previous administration entirely – is inconsistent with the agency’s role in facilitating affordable housing and the market for mortgage-backed securities, experts say. Now run by career staff, Ginnie had a record amount of outstanding obligations last year, exceeding $ 2 trillion.
Its last permanent president was Ted Tozer, who departed in 2017 just before former President Donald Trump took office. Between then and October 2019, the agency – housed inside the Department of Housing and Urban Development – was led by politically appointed acting presidents. But since, it has been run by slightly less senior executives.
“I sure wish they would get a president and really try to get back to the understanding that Ginnie Mae is a critical piece of the housing finance system,” said Tozer, who is now a senior fellow at the Milken Institute. “You just can’t afford to leave it without any kind of leadership.”
The agency’s backing provides a quasi-insurance policy to investors in mortgage-backed securities, ensuring that borrowers in government-backed programs are able to capture lower interest rates on home loans, in turn making many mortgages more affordable.
Michael Bright, left, was former President Donald Trump’s nominee to be the permanent head of the agency. But the full Senate never voted on his nomination. “You just can’t afford to leave it without any kind of leadership,” said Ted Tozer, right, the last Senate-confirmed head of Ginnie Mae.
The current de facto leader is Michael Drayne, who has been serving as Ginnie Mae’s acting executive vice president since the beginning of this year. Seth Appleton – who was the principal executive vice president of the agency and a political appointee – stepped down at the end of 2020. The agency has not had an acting president since Maren Kasper left two years ago; she had headed the agency in a temporary capacity for less than a year.