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Obama Prepares To Kick Out Fannie's Ed DeMarco

Tyler Durden's picture




 

The man who singlehandedly fought the administration over the idea of converting Fannie and Freddie into the latest taxpayer-funded handout machine, FHFA head Ed DeMarco, and refused to write down Fannie and Freddie home loans in yet another Geithner-conceived debt forgiveness scheme, whose cost like any other non-free lunch will simply end being footed again by yet more taxpayers (what little is left of them), appears to have lost the war, and with the second coming of Obama appears set to be replaced as head of the FHFA. The WSJ reports that "The White House has begun preparations to nominate a new director to lead the agency that oversees Fannie Mae and Freddie Mac as soon as early next year, according to people familiar with the discussions. This would pave the way for President Barack Obama to fill what has become one of the most important economic policy positions in Washington." And so the impetus for as many as possible to default on their mortgage in a wholesale scramble to obtain debt forgiveness, will soon take the nation by storm, while the contingent liability will be transferred to those who still believe that taking out debt should be a prudent activity and one that takes into account future cash flows. In other words, the solvent middle class - those who were prudent stupid enough to save when they should have simply be doing what the government does and spend like a drunken sailor, preferably on credit, will soon be punished once more. And like it. Because according to the new broke normal "it's only fair."

From WSJ:

The director the Federal Housing Finance Agency has emerged as a key policymaker because it is the principal gatekeeper to Fannie and Freddie, the mortgage giants that own or guarantee half of all mortgages, at a time when broken mortgage markets have become a top concern of officials at the White House and the Federal Reserve.

 

The FHFA’s current director, Edward DeMarco, took the job more than three years ago in an “acting,” or interim, capacity. He has remained in the position after the Obama administration’s first nominee for the job, Joseph Smith Jr., then the North Carolina banking commissioner, withdrew from consideration in January 2011 amid opposition from Senate Republicans. The FHFA, created 4½ years ago, has never had its own director confirmed by the Senate.

 

Administration officials are still gathering names of potential nominees and haven’t pared down to a shortlist or interviewed candidates, according to people familiar with the matter. White House and FHFA officials declined to comment.

 

Officials are said to be considering an array of candidates: financial regulators or professionals, academics, and current administration officials. Two names frequently mentioned by housing-policy analysts are Susan Wachter, a professor of real-estate finance at the University of Pennsylvania’s Wharton School who served in the Clinton administration, and Michael Stegman, who currently serves as an adviser to Treasury Secretary Timothy Geithner on housing finance. Both declined to comment.

 

Jonathan Fiechter, deputy director for monetary and capital markets at the International Monetary Fund, was approached about taking the job several years ago. Mr. Fiechter, who has held senior positions at the Office of the Comptroller of the Currency and the Office of Thrift Supervision, says he hasn’t had formal discussions recently.

 

After Mr. Smith withdrew from consideration, the Obama administration considered nominating Jim Millstein, the corporate restructuring executive who oversaw the Treasury’s re-privatization of American International Group AIG -2.26%, but backed off when it appeared that any nominee would be blocked, according to people familiar with the matter. “That ship has sailed,” said Mr. Millstein, who has since started his own restructuring company. He says he isn’t interested in the job if it is to be a caretaker position.

While DeMarco's replacement is yet to be determined, one thing can be sure: the next head of the FHFA will not share his predecessor's values. What are they?

Mr. DeMarco has argued that his legal mandate to conserve the assets of Fannie and Freddie leaves little room for policy proposals that have high upfront costs or uncertain future benefits. The career civil servant was the No. 2 official at the agency until his predecessor, an appointee of President George W. Bush, decamped for the private sector.

What is lost in translation is that GSE asset impairment would also lead to a possible future impairment of their liabilities, which are, for all intents and purposes, Federally guaranteed obligations of the US government ever since their September 2008 nationalization (after all the Fed is monetizing $40 billion of GSE debt each month precisely thanks to this loophole). As such, the cost will be borne out by those who still pay in taxes into that great insolvent institution known as the US, as all such tax payments will merely go to fund - both on a current and accrued basis - yet another massive financial black hole.

Then again, who cares about details any more in a banana republic enamored with ultra-short term results and generating upticks in the DJIA at any (taxpayer) cost.

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Mon, 12/10/2012 - 16:35 | 3049601 trav777
trav777's picture

Their position paper which is available publicly:  they are the ONLY source of mortgage market...it's dead.  Private sector is nonexistent in it.  Major challenge is how to get the "Enterprises" phased out of it.  Without this FRB conduit into housing, there'd be no market whatsoever for MBS.

Mon, 12/10/2012 - 16:46 | 3049648 Stackers
Stackers's picture

New FHFA head to be Franklin Raines ?

Mon, 12/10/2012 - 16:53 | 3049682 DoChenRollingBearing
DoChenRollingBearing's picture

More and more corrupt this administration gets every week.

Looks to me like this means two things for each of us:

1)  Yet another reason to be pulling funds out of insolvent banks

2)  Harder for .gov to know about and tax physical gold

 

Mon, 12/10/2012 - 17:01 | 3049710 RockyRacoon
RockyRacoon's picture

<-- Real purpose:  To shovel more money at the banks.

<-- Real purpose:  To help homeowners

Cast your vote folks! 

 

Mon, 12/10/2012 - 17:02 | 3049716 chunga
chunga's picture

Sorry Rocky...I had to junk you.

Is that TRAV777 I see?

Mon, 12/10/2012 - 17:05 | 3049721 RockyRacoon
RockyRacoon's picture

No problem. 

We're just having fun since there isn't shit we can do about it, except what DCRB says: Buy gold!

Mon, 12/10/2012 - 17:07 | 3049730 chunga
chunga's picture

I fucked up and you locked me in.

Too quick with the junk trigger. Changing to green...another TBTF ripoff is coming.

Mon, 12/10/2012 - 19:52 | 3050218 Go Tribe
Go Tribe's picture

obama is such a bankster, the biggest one yet.

Mon, 12/10/2012 - 17:20 | 3049774 chunga
chunga's picture

Either that or Angelo Mozilo.

Mon, 12/10/2012 - 17:37 | 3049839 chunga
chunga's picture

Glenn Russell and George Babcock (top shelf private attorneys) will be on live radio for an hour in the next two weeks talking about this shit.

BAC CEO Named as Defendant in Federal Foreclosure Fraud Lawsuit

Mon, 12/10/2012 - 17:54 | 3049884 tip e. canoe
tip e. canoe's picture

excellent forensic work on that rat's nest in MA btw.   wish the hedge would have developed into more of an open-source detective agency on all things rotten by FIRE, but like rocky said below, i don't run the joint.

Mon, 12/10/2012 - 18:07 | 3049921 chunga
chunga's picture

Do you mean this thing?

DID HARMON LAW BUY JUDGE SCHEIER? ( AND THE 2012 WINNER OF MOST OUTRAGEOUS FRAUDCLOSURE IN MASSACHUSETTS)

It is kind of hard work but if one can concentrate it's fairly easy. Most of the Land Record sites have their own little nuances but it's not impossible.

FWIW...it is all being sent to the MA AG. I don't know these people but I'm tempted to call them to let them know how rotten this is. (I am not a lawyer chasing ambulances but this shit really pisses me off.)

Realtor flips it and doubles his money after all that fraud...blech.

Mon, 12/10/2012 - 19:34 | 3050114 MachoMan
MachoMan's picture

The time is drawing near when I may be chasing things like this...  At present, I'm still saving for my emancipation, but I'll be free of my bondage soon enough if all goes to plan...  hoping on 6 months if all goes well, worst case probably a year.  I'm confident there is a decent plaintiff around here for a pilot case...  state or federal.  If nothing else, I can still be a dick to faceless entities trying to foreclose on the yokels and buy the debtors some precious time to piss away taxpayer money on frivolous bullshit (ipads and whatnot)...  although some of that waste will need to head my way.

Mon, 12/10/2012 - 19:44 | 3050169 chunga
chunga's picture

That is awesome Macho.

These mill attorneys really are not very good and when faced with a competent adversary, they typically fail. Generally the facts are not on their side either.

I get a lot of flak for sticking up for "deadbeats" sometimes but I don't give a fuck. The primary reason I do whatever it is I do is to try to persuade attorneys, good ones, with a pair of balls big enough to fight TBTF - to do just that. Fight them.

Slowly but surely these judges are realizing just who has been "unjustly enriched" the most.

 

Mon, 12/10/2012 - 17:14 | 3049726 fuu
Mon, 12/10/2012 - 17:16 | 3049762 kaiserhoff
kaiserhoff's picture

Time for a special prosecutor on Barry's sorry ass.

Anyone doing a documentary on the bogus birth certificate yet.  Benny bucks to be made and hilarity ensues.

Mon, 12/10/2012 - 17:51 | 3049880 NotApplicable
NotApplicable's picture

Oh, enough of the circuses, already!

As long as people pretend that written laws mean anything, the crime will continue unabated.

Right and wrong do not require thousands, if not millions of words detailing them.

Even the Ten Commandments were superfluous.

Mon, 12/10/2012 - 19:45 | 3050185 RockyRacoon
RockyRacoon's picture

You are on the right track... still.  Everyone talks about what can/should be done to "fix" the problems.  Easy.  Just start tomorrow and enforce the laws as they are.  No pardons, no exemptions, with retroactive zeal within the period that the law was enforceable.  Then the next day start a steady nullification of laws, chronologically, until we get back to the original Constitutional stance.  I reckon in about 200 more years we could actually have coinage as laid forth therein.

Mon, 12/10/2012 - 16:35 | 3049603 Shizzmoney
Shizzmoney's picture

Finally.  Can this asshole (who Geithner approves of, BTW).

Mon, 12/10/2012 - 16:37 | 3049607 SheepDog-One
SheepDog-One's picture

REALLY and who will ObaMao's nominee be? Tyrone Biggums?

Tyrone biggums red bulls - YouTube

Mon, 12/10/2012 - 16:39 | 3049622 fonzannoon
fonzannoon's picture

overqualified.

 

 

Mon, 12/10/2012 - 16:52 | 3049675 Jonas Parker
Jonas Parker's picture

Kwame Kilpatrick...

Mon, 12/10/2012 - 19:40 | 3050162 hawk nation
hawk nation's picture

Who else  Van Jones

 

 

 

 

Mon, 12/10/2012 - 16:36 | 3049611 Joe Davola
Joe Davola's picture

"legal mandate" - LOL

Mon, 12/10/2012 - 16:37 | 3049615 mjorden
mjorden's picture

I think I should quit work ... 

Mon, 12/10/2012 - 16:42 | 3049628 Dr. Engali
Dr. Engali's picture

Forward comrades. I hope you weren't too attached to that paycheck....it need to be redistributed.

Mon, 12/10/2012 - 17:00 | 3049706 darteaus
darteaus's picture

I tried to explain it to my PhD candidate Øbama loving nephew:

What if I gave a class, and everyone gets a 'C' - whether they show up or not.  What quality of work will come out of the students?  What quantity?  How is that different for people who aren't in school?

He didn't get it.

Mon, 12/10/2012 - 17:12 | 3049748 trav777
trav777's picture

Tell him he should redistribute his GRADES to students who drink all the time.

Someday, I will be a HS teacher and I am going to do this for all the self-identified libtard students.  Over/under on how soon their Obama 2012 parents show up to BERATE me for the unfairness of it...?

Mon, 12/10/2012 - 17:25 | 3049795 darteaus
darteaus's picture

Socratic method:

I asked him to list me as an author on his thesis.  His reply, "But you didn't do any of the work."

Mon, 12/10/2012 - 17:31 | 3049812 kaiserhoff
kaiserhoff's picture

You didn't build that, and anyway, a slave's labor belongs to the gubbermint.

Mon, 12/10/2012 - 19:28 | 3050122 Zap Powerz
Zap Powerz's picture

It would appear this candidate doesnt deserve a "PhD".  Can he/she be retrained to fit bras at victorias secret?

Mon, 12/10/2012 - 16:42 | 3049630 bobthehorse
bobthehorse's picture

Obama's a tough motherfucker.

The son-of-a-bitch has his own kill list.

He reminds me of Nixon.  Lots of Hubris.

I wouldn't want to be his enemy.

Mon, 12/10/2012 - 16:52 | 3049673 BlueCollaredOne
BlueCollaredOne's picture

At least you don't constantly end your posts with "Whats a boy to do?" anymore.  Goddamn that shit got annoying.

Mon, 12/10/2012 - 16:53 | 3049680 Dr. Engali
Dr. Engali's picture

 

"I wouldn't want to be his enemy"

 

I've got news for you....you are.

Mon, 12/10/2012 - 16:55 | 3049691 DoChenRollingBearing
DoChenRollingBearing's picture

So are we Dr. Engali, so are we...

Mon, 12/10/2012 - 17:23 | 3049787 trav777
trav777's picture

take it y'all are white, then?

Mon, 12/10/2012 - 17:32 | 3049823 tip e. canoe
tip e. canoe's picture

does that mean he's his own worst 1/2 enemy?

Mon, 12/10/2012 - 17:37 | 3049840 DoChenRollingBearing
DoChenRollingBearing's picture

Well, perhaps a steely gray might be more accurate...

Mon, 12/10/2012 - 17:21 | 3049778 kaiserhoff
kaiserhoff's picture

First thing I learned in graduate schoool.

Either you are a boot-licking, ass kissing lib, or you are the enemy.  Nothing in between.

Mon, 12/10/2012 - 17:34 | 3049827 darteaus
darteaus's picture

Slow learner...

Mon, 12/10/2012 - 16:43 | 3049632 Yen Cross
Yen Cross's picture

Otool should go all in, and shut down that incestuious )Shadow Banking branch ( forever! 

Mon, 12/10/2012 - 16:43 | 3049634 Scisco
Scisco's picture

...they should have simply be doing what the government does and spend like a drunken sailor.

That is not fair to drunken sailors. They stop spending when they run out of money.

Mon, 12/10/2012 - 16:51 | 3049641 Dr. Richard Head
Dr. Richard Head's picture

Give man some cash and he spends for a day.  Teach him how to use a printer and he will spend for a lifetime.

Mon, 12/10/2012 - 16:58 | 3049700 DoChenRollingBearing
DoChenRollingBearing's picture

Wa?  That´s just ´american citizenism´! 

Yu no use Chinese saying like that, raciarist!

Mon, 12/10/2012 - 17:00 | 3049705 Yen Cross
Yen Cross's picture

Priceless ;-}

Mon, 12/10/2012 - 16:50 | 3049636 Dr. Richard Head
Dr. Richard Head's picture

I wants my tax-payer backed bailout.  Paying on my underwater mortgage for a solid 6 years now and all I got to show for it was this tax bill. 

Mon, 12/10/2012 - 16:44 | 3049642 Sutton
Sutton's picture

We are so close to the Executive Order of them all.  It's over

Mon, 12/10/2012 - 16:50 | 3049667 youngman
youngman's picture

The USSR had government owned..distributed..housing too....it was a way of redistributing....you had to know someone in the Party to get one...or be a sports star or some other famous connection....the average Ivan didn´t get one....

Mon, 12/10/2012 - 17:45 | 3049719 Cthonic
Cthonic's picture

Join Americorps(e), get yer bama house!

I will get things done for America - to cull our safer, smarter, and healthier peoples.
I will bring Americans together to strengthen our HUDdled masses.
Faced with apathy, I will take stuff.
Faced with conflict, I will seek out assets.
Faced with adversity, I will persecute.
I will carry this commitment with me like the mark of the beast.
We are Legion, and we will get our bama phones, bama cars, bama houses. BOOYA
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