The case was brought by shareholders of Fannie Mae and Freddie Mac, who said the law that created the agency was unconstitutional.
President Biden on Wednesday removed the chief of the Federal Housing Finance Agency, which oversees the mortgage giants Fannie Mae and Freddie Mac, acting immediately after the Supreme Court ruled that the president had the authority to dismiss the agency’s director. The director, Mark Calabria, who was appointed by President Donald J. Trump, issued a statement wishing his successor well and noting that he respected the decision of the court and the president’s authority to remove him. Mr. Biden did not immediately name a replacement. Replacing Mr. Calabria gives Mr. Biden more control over the fate of the mortgage giants, which play an outsize role in the housing market and are central to many homeowners’ ability to afford homes. Fannie and Freddie do not make home loans but instead buy mortgages and package them into securities, providing a guarantee to make investors who buy those securities whole in case of default. That helps keep the cost of 30-year mortgages low. During his tenure, Mr. Calabria had overseen the enactment of a number of rules that were seen as critical steps toward ending the federal government’s conservatorship of Fannie and Freddie, which was imposed in 2008 at the start of the financial crisis. Mr. Calabria has favored a move toward privatizing Fannie and Freddie and ending the conservatorship. Many housing advocates and Democrats also favor ending it, but they do not necessarily want Fannie and Freddie put into private hands. The Supreme Court ruling stemmed from a dispute between shareholders of Fannie Mae and Freddie Mac and the Treasury Department over $124 billion in payments the two lenders were required to make to the government after the 2008 housing crisis. Justice Samuel A. Alito Jr., writing for a unanimous court on this point, rejected the shareholders’ argument that this so-called profit sweep exceeded the agency’s statutory authority.
