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Zach Carter find yet another indicator that, after the election, Barack Obama plans to fire Federal Housing Finance Agency Administrator Ed DeMarco. But this claim has even less meat on its bones than the previous pledge.
It comes from Bank of America analyst Ralph Axel, who argues that the Administration plans to use housing policy as its “secret weapon”:
Firing DeMarco, Axel said, would unleash a “secret weapon” to boost the economy by allowing more borrowers to refinance their mortgages [...]
“Although DeMarco has agreed to some stimulus programs, including an expansion of the HARP program, much more can be done,” Axel wrote in a note to clients dated Friday, Nov. 2. “We would expect to see President Obama use the recess appointment to replace DeMarco in December were he reelected [...]
“The FHFA director unilaterally decides on guarantees and other fees, underwriting standards, rules relating to loan repurchase requests, rules for loan modifications including principal write-downs,” Axel wrote, saying that replacing DeMarco “could be a major game changer.”
Carter is being a bit imprecise here. DeMarco is already allowing refinancing on GSE loans through HARP 2.0. Those appear to rise and fall on the basis of mortgage interest rates; refinancing applications have dropped for four straight weeks, for example. I don’t know how much more DeMarco or a potential replacement could boost refis. However, Axel does correctly peg the power of FHFA on guarantee fees and loan modifications. Presumably the Administration doesn’t undertake this unless they have a plan for a replacement, probably through recess appointment, who would approve of principal reductions.
But where exactly is Axel getting his information? First of all, it defies logic that, if the plan is to fire DeMarco, you wouldn’t do it BEFORE the election, to at least get some tangible benefit out of it. Firing him in December does nothing electorally, though economically it could help. Second of all, you have to put up this stated commitment to principal reduction at the GSEs, controlled by FHFA, with the action on principal reduction through HAMP, controlled by Treasury. And HAMP principal reductions remain virtually non-existent. If the White House thought this was a good strategy they would enact it through their own channels.
I’m just not seeing an Administration last seen touting the housing “comeback” being all that interested in removing their convenient foil for why housing isn’t improving as significantly as critics want. But I’m happy to be wrong.
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It might well be a secret weapon to boost the economy.
But if FHFA is still independent, what “secret weapon” is there to get rid of DeMarco? He doesn’t work for the President.
How to fire DeMarco may be the most interesting unknown, since the beneficial consequences are already known or reasonably estimated.
Maybe they’ll catch DeMarco kiting a check. I understand such misconduct would be cause for dismissal, whereas mere policy urgencies don’t apply. Then that’s a good argument that no agency, or at least FHFA, should be independent after all.
I think O has a couple of choices. Simply publicly ask DeMarco to step aside, or offer him a bon bon behind the scenes.
The third choice would be for O to tell DeMarco he’s fired, and wait to see what happens.
So, who can fire this dude?
This fits the phoney narrative that progressives are supposed to buy – that “liberal Obama” is waiting until after reelection to be “unleashed” from his previous center right posture.
There is zero evidence to back up that fervent belief from the Obamabots.
I don’t agree.
Second term O can more robustly use his EO prerogatives and regulatory stuff. I think he was a bit late at that so far, probably due to the weight of ACA occupying everything for so long.
A bright spot, however, was the (belated) EO on allowing work permits for some of the undocumenteds. Also he finally gave a push to repeal DADT. There should have been more activism and sooner, though.
I don’t think O can fire DeMarco by EO though. The feckless frustration and anger over DeMarco has been entertaining. He doesn’t always weat a black hat, but just most of the time. That complicates things.
Obama could always have “unleashed” whatever he wanted.
His biggest window of opportunity was as soon as he was elected the first time, with a nation in two wars and economic collapse at the same time. Between his election triumph and popularity, the majorities he had in both houses, and the crisis in the nation and the globe, he could have done almost any positive thing that he wanted. Instead, he chose to be a Republican.
I don’t think any improvements will be about his second term versus his first. He still has to think about what his actions may do to his Party, the Party that got him elected.
I do have a tiny bit of hope that this election woke up some Democrats as to how they get re-elected. For example, I wonder what, if anything, McCaskill will take away from the sharp turn away from Akin. Ditto Donnelly and Mourdock.
Being almost forced by Bain Romney and Ayn Ryan to sell themselves as the party of the working person–and succeeding in turning the polls around that way–will the Democrats finally get a message about where their self-interest lies?
I hope so.