DeMarco To Be Acting Director Of Fannie, Freddie Regulator
August 06 2009 - 10:06AM
Dow Jones News
A top official of the agency that regulates Fannie Mae (FNM) and
Freddie Mac (FRE) will take the reins from the agency's current
director, James B. Lockhart, when he steps down later this
month.
Edward J. DeMarco, chief operating officer at the Federal
Housing Finance Agency, will serve as acting director until the
Obama administration decides who will head the agency. DeMarco, 49,
also is the agency's senior deputy director for housing mission and
goals.
Lockhart's successor is poised to play a key role in deciding
the future of Fannie and Freddie, something the administration has
yet to decide. The White House has said it will unveil a plan for
Fannie and Freddie when it releases its 2011 budget in
February.
The mortgage companies were thrown under the conservatorship of
their regulator last autumn, after mounting mortgage defaults began
to eat through their thin cushions of capital, raising fears they
would collapse.
The government has pumped $85 billion into the firms to keep
them afloat. Lockhart has said they would emerge from
conservatorship once they were stabilized - a process that could
take years.
Speculation is mounting in Washington about what, if any,
changes the Obama administration will propose for the companies -
shareholder-owned firms that have for decades served a public
mission of ensuring the broad availability of mortgage credit.
Proposals include turning Fannie and Freddie into cooperatives
owned by mortgage lenders, remaking them in their old hybrid mold,
folding them into the government or splitting them into smaller
companies. Another idea is to remake the firms as public utilities,
subject to strict regulation and profit limits.
Christina Romer, a top economic adviser to President Barack
Obama, on Thursday declined to discuss the administration's plans
for the companies.
"Of course, something we're going to be thinking about is where
do we go from here," Romer said, adding that she didn't "want to
get ahead of the process," which is just beginning.
-By Jessica Holzer and Henry J. Pulizzi, Dow Jones Newswires;
202-862-9228; jessica.holzer@dowjones.com