Ginnie Mae head's surprise resignation prolongs permanent leadership gap
Acting Ginnie Mae President Michael Bright will leave his post on Jan. 16 and will no longer seek confirmation to be the permanent head of the mortgage secondary market agency.
Bright, who joined Ginnie Mae in July 2017 as executive vice president and chief operating officer, will become the CEO of the Structured Finance Industry Group, effective Jan. 21. Maren Kasper, current executive vice president of Ginnie Mae, will serve as acting president when Bright departs, according to a Department of Housing and Urban Development statement.
It's been two years since Ginnie Mae's last president, Obama appointee Ted Tozer, left the post at the start of the Trump administration after serving for seven years. Bright's nomination as Ginnie Mae president had been pending since May 2018 and President Trump would have had to renominate him due to the start of a new Congress — a move that would undoubtedly been delayed by the ongoing government shutdown.
It's unclear to what extent those delays influenced Bright's decision to withdraw his name from consideration. But in his resignation letter to HUD Secretary Ben Carson, Bright called for greater awareness of the scope of Ginnie Mae's operations.
"I encourage policymakers across Washington to work to understand better the processes, operations, and risks that Ginnie Mae and its staff oversee every single day," Bright wrote.
While his nomination appeared to face reluctance from Democrats at his July nomination hearing, Bright was generally considered a middle-of-the-road choice for the job. The ongoing delay had been attributed to the Senate prioritizing judicial and other nominations, including Consumer Financial Protection Bureau Director Kathy Kraninger.
Ginnie Mae's outstanding portfolio has recently surpassed $2 trillion and under Bright, the agency has probed and ultimately rebuked lenders accused of unnecessarily refinancing veterans' homes to boost revenue.
"It makes no economic sense," Bright said about so-called refi churn in an interview with National Mortgage News, adding that the trend could lead to investor angst, particularly as Department of Veterans Affairs mortgages make up a larger share of the loans in Ginnie Mae securities.
"Investors want a bond with some predictable cash flow and if loans prepay out of a pool seven months after they were already refinanced, that's a very unpredictable cash flow in a rising rate environment," Bright said.
Bright's departure follows the resignation of HUD Deputy Secretary Pam Patenaude, who will also leave this month. Patenaude led the department’s disaster recovery response following a series of destructive hurricanes and wildfires and will be succeeded on an interim basis by Federal Housing Administration Commissioner Brian Montgomery.
Hannah Lang contributed to this report.