Edward Joseph DeMarco is an American government official who served as the acting director of the
Federal Housing Finance Agency
The Federal Housing Finance Agency (FHFA) is an independent federal agency in the United States created as the successor regulatory agency of the Federal Housing Finance Board (FHFB), the Office of Federal Housing Enterprise Oversight (OFHEO), ...
(FHFA), the conservator for
Fannie Mae
The Federal National Mortgage Association (FNMA), commonly known as Fannie Mae, is a United States government-sponsored enterprise (GSE) and, since 1968, a publicly traded company. Founded in 1938 during the Great Depression as part of the N ...
and
Freddie Mac
The Federal Home Loan Mortgage Corporation (FHLMC), commonly known as Freddie Mac, is a publicly traded, government-sponsored enterprise (GSE), headquartered in Tysons Corner, Virginia. their current state that translates directly into minimizing taxpayer losses. We are also charged with ensuring stability and liquidity in housing financing and maximizing assistance to homeowners."
Early Career and Education
DeMarco received a B.A. in Economics from the University of Notre Dame and a Ph.D. in Economics from the University of Maryland (1991). His thesis at U. Maryland was ''Taxes in a model of bank portfolio choice''.
DeMarco worked in the U.S. General Accounting Office for seven years (1986-1993). He then worked at the U.S. Treasury as director of the Office of Financial Institutions Policy (1993-2003) where he oversaw analyses of public policy issues involving government sponsored enterprises and other financial institutions. He then moved to the Social Security Administration (SSA) where he was the Assistant Deputy Commissioner for Policy (2003-2006). There he ran the SSA's policy, research, and statistics functions. His penultimate role before acting director of the FHFA was COO and Deputy Director Office of Federal Housing Enterprise Oversight (OFHEO) which he held for three years (October 2006-August 2009). In August 2009, President Obama promoted DeMarco to the position of acting director of Federal Housing Finance Agency.
Criticism
A
Change.org
Change.org is a worldwide nonprofit petition website, based in California, US, operated by the San Francisco-based company of the same name, which has over 400 million users and offers the public the ability to promote the petitions they care abo ...
petition from March 2012 claims that DeMarco is "the biggest obstacle to serious economic recovery. ... He oversees 60% of the country's home loans. Regardless of expert advice to provide principal reduction to homeowners whose homes are underwater, DeMarco has personally blocked it. While DeMarco stands by, the 5 largest private banks are already agreeing to provide principal reduction to homeowners under the 50 state Attorney Generals' Settlement" DeMarco (2012) reported that Fannie Mae and Freddie Mac hold only 29 percent of the seriously delinquent loans (where the homeowner has missed at least 3 or more payments or is in foreclosure), which leaves 71 percent outside the conservatorship of FHFA: Only 3.8 percent of loans managed by Fannie Mae and Freddie Mac are seriously delinquent, while 13.5 percent of other loans are seriously delinquent. He provided further details about foreclosure prevention efforts both in and outside FHFA, noting that the FHFA re-default rates are lower than outside his purview.
Nobel economist and ''
The New York Times
''The New York Times'' (''the Times'', ''NYT'', or the Gray Lady) is a daily newspaper based in New York City with a worldwide readership reported in 2020 to comprise a declining 840,000 paid print subscribers, and a growing 6 million paid d ...
'' columnist
Paul Krugman
Paul Robin Krugman ( ; born February 28, 1953) is an American economist, who is Distinguished Professor of Economics at the Graduate Center of the City University of New York, and a columnist for ''The New York Times''. In 2008, Krugman was ...
called for DeMarco's firing in his blog on July 31, 2012. Krugman said that DeMarco had rejected a Treasury Department request to offer debt relief to homeowners, with Treasury covering 63 percent of the debt relief. Krugman said DeMarco's rejection was based on the net loss debt relief would cost taxpayers. Krugman questioned DeMarco's analysis, but also said that "deciding whether debt relief is a good policy for the nation as a whole is not DeMarco's job. His job — as long as he keeps it, which I hope is a very short period of time — is to run his agency. If the Secretary of the Treasury, acting on behalf of the president, believes that it is in the national interest to spend some taxpayer funds on debt relief, in a way that actually improves the FHFA's budget position, the agency's director has no business deciding on his own that he prefers not to act."http://krugman.blogs.nytimes.com/2012/07/31/fire-ed-demarco/ Paul Krugman, New York Times July 31, 2012 Three days later, in ''The New York Times'', Krugman reiterated that DeMarco's efforts, along with other Republican policy makers in the
legislative branch
A legislature is an assembly with the authority to make laws for a political entity such as a country or city. They are often contrasted with the executive and judicial powers of government.
Laws enacted by legislatures are usually known ...
, have stalled the economy, and called again for Obama to fire DeMarco and replace him with a
recess appointment
In the United States, a recess appointment is an appointment by the president of a federal official when the U.S. Senate is in recess. Under the U.S. Constitution's Appointments Clause, the President is empowered to nominate, and with the a ...
. Timothy Geithner is said to oppose DeMarco on this issue as well. DeMarco defended his position, claiming that allowing the debt relief would present a notable moral hazard, perhaps causing some homeowners to strategically allow themselves into debt to receive assistance.