Posted on 04/13/2013 1:55:21 PM PDT by whitedog57
The title of the WSJ’s Nick Timiraos article couldn’t be more ironic: “Economist Eyed for Fannie Watchdog.”
It is ironic in a couple of ways. First, Zandi has no regulatory experience (as far as I know). Second, he is on record touting every government loan modification and principal reduction program. See, for example, his New York Times editorial with Joseph Stiglitz.
The current FHFA Acting Director, Edward DeMarco, has been a champion of shrinking Fannie Mae and Freddie Mac’s footprint in the market and consolidating their operations.
According to Timiraos: Without clear direction from the White House or Congress, Mr. DeMarco has begun to move more aggressively to shrink the firms’ heavy presence in the mortgage market. Last month, he announced plans to merge some of the firms’ back-office operations into a separate company that, for now, would be jointly owned by Fannie and Freddie.
DeMarco has taken his job seriously: protecting taxpayers and getting Fannie and Freddie back to profitability. Zandi, on the other hand, is the Will Rogers of government intrusion in the free market: he never met a government housing program he didn’t like.
FHFA’s study on principal reduction indicates that while not in the best interest of taxpayers, they could reduce losses for Fannie Mae and Freddie Mac under certain circumstances.
As I have discussed before, we still have 15 government loan programs in force and HARP has gaining steam in 2012.
Much of the HARP activity has taken place in the “sand states”:
And house prices in sand states (like Phoenix, Las Vegas, Riverside CA and Miami) are on the increase.
The point I am making is that under DeMarco’s excellent oversight, 1) Fannie and Freddie are generating record profits, 2) HARP has been successful, 3) house prices are increasing in numerous markets and 4) foreclosures are decreasing. Do we REALLY need to have Fannie and Freddie agree to principal reductions advocated by the Administration and Congressional Democrats?y
Please Mark, if you are appointed (and confirmed), think twice (and then some) about opening the principal reduction floodgates.
I prefer DeMarco’s approach of less government intervention and I like his approach of common platforms for Fannie and Freddie.
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