The Wall Street Journal
By: Nick Timiraos
July 12, 2011
The Obama administration is tapping Carol Galante, a housing official and former affordable housing developer, as the acting commissioner of the Federal Housing Administration.
The FHA guarantees nearly $1 trillion in mortgages and has seen its market share swell dramatically as the housing bust deepened and private lenders retreated. That has elevated the job of FHA commissioner to become a top housing industry leader.
Ms. Galante currently serves as deputy assistant secretary for multifamily housing in the Department of Housing and Urban Development, which oversees the FHA. Before joining the agency in 2009, she served for 13 years as the president of San Francisco-based Bridge Housing Corp., a nonprofit developer of affordable housing.
Ms. Galante, 56 years old, will become the FHA's acting commissioner on Tuesday. "Having previously served in the position Carol is vacating and the one she is stepping into, I am extremely confident that her proven track record is exactly what HUD needs," Housing Secretary Shaun Donovan said in a statement.
Officials wouldn't elaborate on plans to name a permanent director, which requires a presidential nomination and Senate confirmation, but industry officials believe Ms. Galante is likely to be nominated for that job. A HUD spokeswoman declined to comment.
In her new role, Ms. Galante will have to fill a number of top vacancies at FHA, including the position she previously held. Vicki Bott, who had overseen the FHA's single-family housing division, left the agency last month. Robert Ryan, the agency's chief risk officer who had served for the past three months as the acting director, will become a senior adviser on housing finance to Mr. Donovan.
The previous commissioner, David Stevens, had become one of the administration's top housing advisers and left the agency in March to become chief executive of the Mortgage Bankers Association. Mr. Ryan, a former Freddie Mac executive, will inherit his duties overseeing a wide-ranging portfolio of housing policy issues such as the eventual revamp of the government's role in the mortgage market.
In her previous position, Ms. Galante oversaw the FHA's multifamily lending operations, which have grown sharply over the past two years. But the agency has played an even bigger role backing single-family mortgages because it has become the last main source of low down payment loans. It accounts for nearly 40% of all purchase-loan applications.
The FHA's rapid growth has been accompanied by ballooning mortgage defaults that have forced the agency to raise the fees it charges borrowers in a bid to avoid a taxpayer bailout. The agency sits at the center of a debate over how far the government should prop up fragile housing markets and how much taxpayer risk it should take to do that.
Other proposed regulations on private mortgage lenders could also shift more business to the FHA at a time when officials are trying to wean the market off of government support. The future of the agency could be heavily shaped by the coming debate over how to wind down or restructure mortgage titans Fannie Mae and Freddie Mac.
Write to Nick Timiraos at firstname.lastname@example.org