As of June 28, Freddie Mac CFO Christian Lown will resign from the government-sponsored enterprise (GSE) mortgage provider to join CoStar, the behemoth real estate listing and data and analytics company valued at around $30 billion.
Usually, when someone leaves a government job for the private sector, there’s a tacit understanding that the new position comes with less public scrutiny and more—much more—money. There’s little reason to doubt that is the case here.
Considering Lown oversaw spectacular growth at Freddie Mac and spearheaded the company’s recently proposed home equity cash-out refi program, which allows homeowners to keep the low rate of their current loan while taking out a second, it seems odd that Lown should leave so abruptly, especially when things were seemingly going so well. In last month’s first-quarter 2024 report, Lown cited some impressive numbers for Freddie Mac, guiding the GSE to $2.8 billion in net income, an increase of $771 million, or 39% year over year.
What Freddie Mac’s Home Equity Proposal Could Mean for Investors
Freddie Mac’s low-rate home equity proposal has its critics, who feel it could lead to another financial crash. However, others are celebrating Lown’s innovative thinking in releasing a possible stimulus of $3 trillion into the housing market without federal spending.
Meredith Whitney, CEO of Meredith Whitney Advisory Group and one-time “Oracle of Wall Street” who predicted the Great Financial Crisis, stated in a column for the Financial Times:
“This was a smart move by Freddie, and the FHFA [Federal Housing Finance Agency] will do a lot of good by approving it. Despite the more than $32 trillion in equity on homeowner balance sheets, very little of it has been tapped through home equity loans.”
Whitney went on to state the case for the low-interest home equity option:
“Most people in the U.S. are feeling the sting of persistent inflation, but older Americans…