FHFA's DeMarco to be Replaced Early Next Year: WSJ

by devteam December 11th, 2012 | Share

The WallrnStreet Journal is reporting that the Obama Administration is planning tornname a permanent Director of the Federal Housing Finance Agency, perhaps asrnsoon as the beginning of next year.    Nick Timiraos reports that, while the WhiternHouse has declined comment, sources familiar with the Administration say officialsrnare gathering names of potential nominees but have not yet whittled it down torna short list or interviewed anyone for the post.</p

Edward J. DeMarco has been ActingrnDirector of FHFA since August 25, 2009, replacing James B. Lockhart, III whornhad overseen the transition of the former Office of Federal Housing EnterprisernOversight into FHFA.  President Obama hadrnnominated Joseph Smith Jr. to be director but the Senate made it clear that nornnominee the President put forward would be confirmed.</p

FHFA is conservator of Fannie Mae andrnFreddie Mac (the GSEs) and DeMarco has earned both praise and vilification forrnthe job he has done there.  There havernbeen calls from some liberal organizations for the President to fire him forrnFHFA’s performance during the housing and subsequent foreclosure crisis andrnthese calls grew as DeMarco stood firm in his decision to forbid the GSEs torninclude principal reduction as a method of loan modification.  </p

On the other hand, The Journal points to a warm reaction received by DeMarco last weekrnat a SIFMA conference and to the praise he has received from “mortgage traders, congressional Republicans, and somernindustry executives (who) have lauded Mr. DeMarco as a principled adherent tornthe law and steward of taxpayer dollars.'</p

Despiternthe problems the President had appointing an FHFA Director and in getting otherrnsub-cabinet level positions confirmed, the Journalrnsays a recess appointment is unlikely because it would risk angering SenaternRepublicans during Fiscal Cliff negotiations and poisoning the well ahead of arnnumber confirmations of higher ranking officials going into the President’srnsecond term. </p

Timiraos lists several names of possiblernreplacements for DeMarco including:</p<ul class="unIndentedList"<liSusanrnWachter, professor of real-estate finance at the University of Pennsylvania'srnWharton School;</li<liMichaelrnStegman, an advisor to Treasury Secretary Timothy Geithner on housing finance;</li<liJonathanrnFiechter, deputy director for monetary and capital markets at the InternationalrnMonetary Fund</li</ul

The Journal says,rn”Replacing Mr. DeMarco could give the administration greater latitude to expandrninitiatives to refinance underwater borrowers or to embark on a tailoredrnprincipal forgiveness program. Any replacement would also play an importantrnrole guiding any process of overhauling Fannie and Freddie as thernadministration prepares to unveil more details about its preferred course.”</p

Beforernbecoming Acting Director DeMarco had served as FHFA’s Chief Operating Officer andrnSenior Deputy Director for Housing Mission and Goals since FHFA’s inception inrn2008 and in the same positions at FHFA’s predecessor agency from 2006.  He served earlier in the Social SecurityrnAdministration and the U.S. Treasury.  

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About the Author


Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, is a PASBA member accountant located in Londonderry, New Hampshire.

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