Housing Chief DeMarco attracts criticism by protecting Fannie, Freddie assets
Edward DeMarco, a little-known man who has spent a lifetime in inconspicuous governmental roles, is now calling the shots as the White House presses to stimulate the housing market, the Wall Street Journal reported. DeMarco, acting director of the Federal Housing Finance Agency, was named the conservator of Fannie Mae and Freddie Mac when the U.S. government nationalized them three years ago.
The main issue he’s tackling is the debate on mortgage refinancing, between those who hope to limit taxpayer losses short-term and those who say using the firms is in the long-term interest of taxpayers, the Journal said. While economists in the Obama administration and at the Federal Reserve believe Fannie and Freddie could bolster the economy by loosening restrictions on borrowers wishing to refinance their loans, others argue that the firms could speed up a housing recovery by financing more local investor purchases of foreclosed properties.
DeMarco identifies his mission as conserving Fannie and Freddie’s assets, even if that means saying no to well-meaning initiatives. “It is a very slippery slope to say, ‘Well, this would help,'” he said.
DeMarco’s focus “is on the short-term profits for Fannie and Freddie, not on the health of the housing market, and that is short-sighted,” said Peter Swire, a former White House housing adviser. [WSJ]