WSJ:White House is said to be considering Mark Zandi to head the FHFA.
By NICK TIMIRAOS
Mark Zandi, a prominent economist, has emerged as a leading candidate to head the regulator of mortgage-finance companies Fannie Mae FNMA -2.80% and Freddie Mac FMCC -4.13% amid signs that he would likely attract support from Senate Republicans, according to people familiar with the matter.
The White House hasn't yet decided who to nominate as the next director of the Federal Housing Finance Agency, a position it has struggled to fill. Along with Mr. Zandi, the Obama administration has also been considering Rep. Mel Watt, a North Carolina Democrat. The FHFA director has become an increasingly important economic-policy position in Washington, because the agency serves as the warden of Fannie and Freddie, which own or guarantee half of all the nation's mortgages.
Mr. Zandi, co-founder of an economic-forecasting firm that was purchased by Moody's Corp. MCO +0.07% in 2005, serves as chief economist of Moody's Analytics.A registered Democrat, he was an economic adviser to the 2008 presidential campaign of Sen. John McCain (R., Ariz.). He speaks frequently on the economy, fiscal issues and housing—testifying before Congress at least nine times in the last two years—and played a key role advising congressional Democrats on the 2009 economic-stimulus bill.
In an interview Thursday, Mr. Zandi dismissed a question about whether he was being considered for the FHFA job. "Who knows what they're going to do with that," he said, declining to elaborate.
The FHFA's current director, Edward DeMarco, took the job four years ago in an acting capacity after his predecessor left for the private sector. Mr. DeMarco has at times clashed with the Obama administration over homeowner aid, and left-leaning groups have campaigned to replace him. The agency, created five years ago, has never had its own director confirmed by the Senate because of Republican opposition to an earlier nomination.
Mr. Zandi has attracted attention, in part, because he may have a good chance at winning Senate confirmation. Senate Republicans have largely supported Mr. DeMarco and are expected to scrutinize his successor closely. But Mr. Zandi may placate these critics.
Sen. Bob Corker (R., Tenn.), who serves on the Senate Banking Committee, said in a written statement Friday: "If Mark Zandi and the administration have an acceptable plan to transition us away from our dependence on [Fannie and Freddie], I'm optimistic that he could do a good job helping our country effectively execute that plan while also protecting the taxpayer."
On housing, Mr. Zandi has published a paper outlining the need for a continued government role in backstopping the home-loan market.
While he has sometimes advocated more government intervention to address the foreclosure crisis, he has also called for scaling back the mortgage-interest deduction and the government's role in the mortgage market once the current crisis has abated.
Replacing Mr. DeMarco could give the administration greater latitude to expand initiatives to help homeowners facing foreclosure and to mediate disputes over when banks should be forced to "buy back" defaulted mortgages, which some policy makers fret has kept credit standards too tight. But people familiar with the process have said that the Obama administration's push to fill the FHFA position has less to do with specific policy flare-ups and more to do with its desire to have a permanent director oversee the process of overhauling Fannie and Freddie.
Without clear direction from the White House or Congress, Mr. DeMarco has begun to move more aggressively to shrink the firms' heavy presence in the mortgage market. Last month, he announced plans to merge some of the firms' back-office operations into a separate company that, for now, would be jointly owned by Fannie and Freddie.
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