Potential FHFA director replacement lists keeps growing… and growing
With Ed DeMarco set to testify Tuesday — and no doubt facing a grilling by members of the House Financial Services Committee — the guessing game of potential nominees to succeed the current acting director of the Federal Housing Finance Agency continues with no clear decision in sight.
HousingWire’s Jacob Gaffney posted Deutsche Bank’s [stock DB][/stock] prediction that an academic would likely replace DeMarco.
Later on, I posted that Compass Point Research threw in its two cents, casting its vote for Ted Tozer, president of Ginnie Mae.
Now a new market expert is adding to the ever-growing list of predictions: Paul Miller of FBR Capital Markets.
Miller explained that the Wall Street Journal reported that veteran congressman and member of the House Financial Services Committee Mel Watt, D-N.C., is being considered to replace DeMarco.
Congressman Watts is a supporter of principal reductions, something DeMarco is against, and has backed efforts to expand refinancing options under the Home Affordable Refinance Program.
So the obvious question is could Congressman Watt be confirmed?
It’s highly doubtful.
Put simply, Miller and his colleagues anticipate concern that Watt may not meet statutory requirements for the director’s position.
"Senate Republicans (who have the votes to block a nomination) will be extremely reluctant to support a candidate who has publically backed principal reductions, has supported bankruptcy changes allowing for 'cram-down' on residential mortgages, and served on the House Financial Services Committee during the height of power of Fannie and Freddie (having accepted campaign contributions from both)," FBR Capital explained.
Furthermore, if Watt’s nomination was not successful, FBR Capital believes that any other emerging candidates would also face similarly long odds in the Senate.
So once again, this begs a bigger question: is there truly anyone fit to replace DeMarco?
The odds seem to be ever in the current acting director’s favor.