Weekend Economists Chart the Bradbury Chronicles, June 8-10,2012

[Demeter]

60. That's Good Old Ed DeMarco: Edward DeMarco - FHFA Chief & Public Enemy #1

http://www.loansafe.org/forum/stop-foreclosure-tell-us-your-story/46289-edward-demarco-fhfa-chief-public-enemy-1-a.html

This guy is the reason why Fannie and Freddie won't do principal reductions but yet still hand bonuses out to the executives. Fannie and Freddie loans are not included in the AG foreclosure settlement and slated for principal reductions. Folks have asked him to allow principal reductions or step down from his post...

Ed DeMarco: Public Enemy FROM OCTOBER

http://online.wsj.com/article/SB10001424052970203687504577001962437746618.html

President Obama and Democrats are unleashing the big guns on the man they now see as a top threat to their retaining the White House.

Mitt Romney?

Nah. Try Edward J. DeMarco, the acting director of the Federal Housing Finance Agency, an independent regulator created in 2008. That job makes Mr. DeMarco the conservator of Fannie Mae and Freddie Mac—those mortgage beasts of nationalized and bailed-out fame. Put another way, he's the man standing guard over the two entities Democrats would most like to milk in aid of their election prospects.

What else have they got? The housing market stinks, in part thanks to Obama housing programs that have served to slow recovery. Democrats have blown the bank, and several future banks, on non-stimulating stimulus, giving those stingy Republicans an excuse to refuse to pay for any more housing bailouts. With Mr. Obama's poll numbers slipping, he needs something big to offer in aid of housing and the economy overall. And there sit Fannie and Freddie, just waiting to be plundered. Since last year the White House and Democrats have been pushing for Mr. DeMarco's agency to embrace the biggie of housing bailouts: "principal write-downs," in which lenders would be required to outright forgive a portion of homeowners' outstanding mortgage debt. Democrats are furious that the housing-finance regulator won't hand out more taxpayer dollars through mortgage principal reductions.

The White House sees this as—woohoo!—"free stimulus," a way to quickly dump money into borrowers' pockets, no congressional approval or official spending estimates needed. Fannie and Freddie would swallow the losses, quietly adding to the $141 billion taxpayers have already blown on the pair. Democrats would meanwhile get big-time backslaps for aiding the housing market, and just in time for November 2012.

But Mr. DeMarco won't play ball. The 51-year-old regulator, who has spent a career in serious Washington jobs, takes seriously his legal obligation to preserve Fannie's and Freddie's assets, thus protecting taxpayers. He's pushed back on a number of Obama housing schemes, but his real affront is refusing mortgage forgiveness. When I called Mr. DeMarco, he told me he does view it as his mandate, as conservator, to "be actively and aggressively engaging in loss mitigation activities" for homeowners, at least when they end up costing Fannie and Freddie less than foreclosure. The agency has engaged in 1.9 million such transactions. But when it comes to principal forgiveness, says Mr. DeMarco, there is no "upside" to taxpayers—the lenders lose whether the borrower fails or succeeds. "If Congress wants to appropriate money" to pay for the program, "that changes the calculus." Until then, he doesn't view principal forgiveness as within his "statutory mandate."

Mr. DeMarco these days is being treated with all the courtesy Democrats normally reserve for Paul Ryan. The White House's initial instinct was to disappear the troublemaker, who inherited his job in 2009 after his predecessor left. The Obama team a year ago nominated North Carolina Banking Commissioner Joseph A. Smith, who looked to be far more on the Obama political page. Republicans balked, and in January Mr. Smith withdrew his troubled nomination...