Oct. 26, 2012 – An Oct. 24 report in the Financial Times says Ed DeMarco’s tenure as acting director of the Federal Housing Finance Agency may come to an end if President Obama wins a second term in November.
The article, “White House seeks removal of Fannie regulator,” by Shahien Nasiripour, notes that DeMarco disagrees with the Obama administration’s push to require lenders to reduce principal on troubled mortgage loans.
In June, DeMarco’s rejection of that plan prompted Treasury Secretary Tim Geithner to say DeMarco was “making a decision that ran contrary to the best interests of the nation,” according to the article. That was just “one of a number of decisions” over which DeMarco and the administration have been at odds.
NAFCU has long argued to lawmakers and the administration that offering principal reduction for homeowners would do more harm than good. A chief concern is that current borrowers who have underwater mortgages but are current on their loans now would be encouraged to strategically default to qualify.
In late July, DeMarco told lawmakers that the FHFA had no plans to include a “principal reduction alternative” to the government’s Home Affordable Mortgage Program – as NAFCU had urged. DeMarco said the benefits to homeowners of such a program would not outweigh its costs or risks.
President Obama named DeMarco acting director of the agency in 2009.
Earlier this month, NAFCU met with FHFA representatives to discuss the agency’s recently unveiled plans for a new single securitization platform designed to serve the government-sponsored enterprises and preserve access to the secondary market. The agency has also issued a 31-page updated strategic plan earlier (delete- the FHFA released) this month.