Now that Congress provided the nation and housing market temporary relief by flicking the government switch back on — thanks for that — talks will now turn back to many issues on their to-do list, including who will oversee the Federal Housing Finance Agency.
The greatest guessing game on Capitol Hill appears to be who will lead the conservator of Fannie Mae and Freddie Mac — so of course, we over here at HousingWire have to continue to throw in our two cents. And here's mine.
Back in July, President Obama’s FHFA nominee Rep. Mel Watt, D-N.C., failed to obtain a vote on his nomination to lead the conservator and many market analysts still hold firm that his nomination is unlikely.
“We remain pessimistic regarding Rep. Watt’s prospects and believe that there is only a 1-in-3 chance that he will be confirmed as FHFA director,” explained Compass Point analyst Isaac Boltansky.
He added, “By our count, Rep. Watt is currently five votes short of the 60 votes needed for conformation…”
It would seem that there are only three potential options: FHFA current acting director Ed DeMarco stays put, one of his lieutenants succeeds his post of acting director as outlined by law or Moody's Analytics housing economist Mark Zandi is nominated.
Is it possible for Zandi to be confirmed if nominated for the post?
He would have a more realistic shot than Watt because Zandi is as close to a household name as an economist can be and he also largely navigated the political division in Washington with great success.
Furthermore, Zandi is generally well liked on Capitol Hill as evidenced by his numerous testimonies before Congress.
“That experience and the interpersonal relationships with Senators and their staffers will undoubtedly soften the ground for Zandi if he were to be nominated,” Boltansky said.
He continued, “We simply do not know if he would want the job.”
On a realistic note, it seems that while all of America is behind Zandi, he hasn’t confirmed any interest in the position – leaving us to deal with convincing options.
The bottom line is that DeMarco is general well respected within the administration – give or take a few points of disagreements like principal reduction and loan limits.
As a result, I have to agree with Boltanksy when he says that he doesn’t believe there is urgency within the White House to dethrone DeMarco, especially given the major strides in housing fundamentals . DeMarco isn’t going anywhere for the foreseeable future unless it’s on his own terms.
Coming full circle, this brings the market back to the age-old question: Who is best fitted to replace DeMarco?