Obama Said to Weigh DeMarco Replacements as Fannie Mae Regulator
President Barack Obama is getting closer to nominating a replacement for Edward J. DeMarco, the acting regulator of Fannie Mae and Freddie Mac (FMCC), according to three people familiar with the discussions.
U.S. Representative Mel Watt, a North Carolina Democrat, is a candidate to be director of the Federal Housing Finance Agency, according to one of the people, who requested anonymity because the nomination hasn’t been decided. Phyllis Caldwell, a former Treasury Department official, is also being considered, according to the other two people. Michael Stegman, Treasury’s housing adviser, is also a candidate.
Amy Brundage, a White House spokeswoman, had no comment.
DeMarco, 52, is a career government employee who has served as FHFA acting director since 2009. He has been criticized by housing advocates and Democratic lawmakers for refusing to let the two U.S.-owned companies cut debt for borrowers whose mortgages exceed the value of their homes.
At the same time, he has earned praise from Republican lawmakers for his focus on improving the bottom line at the two companies, which were taken into federal conservatorship in 2008 after loan losses pushed them to the brink of bankruptcy.
Fannie Mae (FNMA) and Freddie Mac returned to profitability last year after drawing almost $190 billion in aid from Treasury to stay afloat. The companies package mortgages into securities on which they guarantee payments of principal and interest.
An FHFA nominee would need to be confirmed by the U.S. Senate. Joseph A. Smith, the former North Carolina bank regulator who was nominated by Obama in 2010, withdrew his name after it became clear he wouldn’t get Republican support needed to reach the 60-vote threshold for bringing the matter to the floor for a consideration by the 100-member Senate.
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