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36 DEMARCO STEPS DOWN AS SENIOR DEPUTY DIRECTOR OF THE FHFA After serv- ing the Fed- eral Housing Finance Agen- cy (FHFA) for nearly six years, the organiza- tion's former acting director and current senior deputy director, Ed- ward DeMarco, announced his intent to part ways with the agency at the end of April. DeMarco confirmed his departure plans in a letter directed to current agency director Mel Watt. "I appreciate your invitation to assist you with the recent leadership transition and I have been pleased to do so," the message read in part. "With the transition now well along, I believe the time has come for me to seek other opportunities." He made no announcements about his future plans. DeMarco's 28-year career as a public servant has spanned multiple agencies, including the Social Security Administration, the De- partment of the Treasury, the U.S. General Accounting Office, and the Office of Federal Housing Enterprise Oversight (OFHEO), FHFA's predecessor agency, where he served as COO and deputy director. Starting from FHFA's inception in 2008, he worked as the agency's COO and senior deputy director for Housing Mission and Goals. It was in 2009 that President Obama desig- nated DeMarco as acting FHFA director, mov- ing the former deputy into a role that made him a lightning rod in the ongoing debate over how to move housing forward after the crash. Perhaps the biggest point of contention in DeMarco's tenure leading the agency was his steadfast refusal to direct Fannie Mae and Fred- die Mac to allow principal forgiveness on troubled mortgages. He expressed his own thoughts and that of FHFA on the matter in a statement to lawmakers in 2012: "Given our multiple responsibilities to conserve the assets of Fannie Mae and Freddie Mac, maximize assistance to homeowners to avoid foreclosures, and minimize the expense of such assistance to taxpay- ers, FHFA concluded that [plans for prin- cipal reduction options] did not clearly improve foreclosure avoidance while reducing costs to taxpayers relative to the approaches in place today," he said. While his stance attracted praise from some—including Tennessee Sen. Bob Corker, who since then has become an active voice in GSE reform—it also made him a target for irate consumers, who started petitions calling for his dismissal. (Also jumping into the fray was noted economist and liberal columnist Paul Krugman, who made his feelings known in a piece titled simply "Fire Ed DeMarco.") Nevertheless, DeMarco continued to stick to his policy, even in his resignation letter, noting: "FHFA has existed for less than six years and during that time has faced enormous challenges that required balancing multiple legal and policy requirements and goals." As a closing thought, he also expressed his "earnest hope" that recent initiatives from policy- makers to reform housing finance take hold. "I have publicly stated numerous times that the conservatorships of Fannie Mae and Freddie Mac were never intended to be a long-term solution," he said. "Congress must act to bring the conservatorships to an end and chart the course for a new structure for housing finance." For his part, Watt—who separated himself from DeMarco's style early on by suspending a prior directive to raise guarantee fees—lauded the departing deputy for his work as the agency moved from one director to another. "Ed has been an invaluable asset to FHFA, and I appreciate his assistance to me during this transitional period," Watt said in a statement. "roughout his 28-year career as a public servant, he has made many important public policy contributions grounded in his strong background in housing finance. I wish him the very best in his future endeavors." FHFA'S HPI UP 0.5 PERCENT IN JANUARY January experienced an increase in house prices, which rose by 0.5 percent on a season- ally adjusted basis from the previous month. According to the Federal Housing Finance Agency (FHFA) House Price Index (HPI), for the year beginning January 2013 to January 2014, the HPI increased by 7.4 per- cent. Prices have increased for 23 of the last 24 months, beginning in February 2012. e index is slightly less than the S&P/ Case-Shiller, which reported home prices increased by 0.8 percent month-to-month. e only month to buck the trend of ris- ing prices was November 2013, where prices decreased by 0.1 percent. Previously reported as 0.8 percent, December's HPI was revised to reflect a 0.7 percent increase. e FHFA's HPI is calculated by using home sales price information from mortgages either sold or guaranteed by Fannie Mae and Freddie Mac. January's HPI is 8 percent below the April 2007 peak—roughly the same as the May 2005 index level, according to the HPI. "For the nine census divisions, season- ally adjusted monthly price changes from De- cember 2013 to January 2014 ranged from -0.3 percent in the West South Central division to +1.3 percent in the Middle Atlantic division," according to the FHFA's report. On a yearly basis, each region of the United States showed positive gains in house prices. e Pacific Region, comprised of Hawaii, Alaska, Washington, Oregon, and California, posted a whopping 14 percent increase year-over-year. Other notable regions include the Mountain (up 11 percent), the South Atlantic (up 8.4 percent), and the East North Central (up 6 percent). Foreclosures completed since the financial crisis began in approximately September 2008. Source: CoreLogic STAT INSIGHT 4.9 million

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