Edward DeMarco’s refusal to allow principal forgiveness at Fannie Mae and Freddie Mac has led to renewed calls for his head. A little-known fact is that replacing DeMarco as acting director of the Federal Housing Finance Agency might not make a bit of difference, even if legal hurdlesto his ouster could be surmounted.
The 2008 law that created FHFA restricts who can be appointed as the agency’s “acting director.” Under the law, President Barack Obama would have to choose among three deputy directors at FHFA, two of whom were hand-picked by DeMarco. And the third? It’s DeMarco himself, who remains FHFA’s deputy director for housing mission and goals.
Obviously it’s impossible to know whether the two deputy directors picked by DeMarco — Jon Greenlee and Stephen Cross — oppose principal reduction to the degree their boss does. But given the staff analysis FHFA released yesterday, the opposition to principal write-downs at Fannie and Freddie extends beyond the top boss.