DS News

94 Former FHFA Acting Director Edward DeMarco has the unique gift of focus when trying to achieve a goal. Never one to be influenced by the voices of detractors or bothered by controversy surrounding him, DeMarco stuck to his guns a few years ago when a barrage of critics called for him to extend principal forgiveness to the millions of borrowers who were underwater on their mortgages—his reasoning being that it was not part of the mandate of the conservatorship. DeMarco's career has been one of public service, one that led him through several high- level government positions that prepared him to take over such an office as the acting director of the FHFA. At the time he took the reins in September 2009, the agency, and the FHFA's conservatorships of Fannie Mae and Freddie Mac, were only a year old. For the next four and a half years, he led the agency through the most difficult and tumultuous period ever for housing finance. By the time DeMarco left office in January 2014, there were fewer defaults, fewer foreclosures, and fewer underwater borrowers than there had been four and a half years earlier—but he still believed there was work to do in the area of housing policy. In September 2014, he joined the Milken Institute, a think tank that engages in research and policy development in a number of areas, as a senior fellow-in-residence with the Institute's Center for Financial Markets. A fair percentage of DeMarco's writings and speeches with the Milken Institute center on housing policy, in order to complete what he calls "unfinished business." In this exclusive interview with DS News, DeMarco discussed his work, homeownership, recovery from the crisis, the policies of his successor, and the emphasis on enforcement by the current administration. WHEN YOU LEFT FHFA, WAS YOUR GOAL TO STAY INVOLVED IN HOUSING AND HOUSING POLICY SOMEHOW? When I first left FHFA, I wasn't quite sure what I would do next or how involved I would be in housing. I spent some time thinking about it, and I had this opportunity to join the Milken Institute and I was very pleased to do so. I've devoted so much time and effort to housing policy, and to me, it still feels very much like unfinished business. Our country had this financial crisis, and it was centered on the housing market. As far as what we've done in response to the crisis, some of the basic elements of housing finance that broke down have not yet been repaired. I'm interested in trying to contribute in some fashion to getting that work done, and the Milken Institute has certainly given me an opportunity to continue to work on these issues. One of the things I am continuing to think about, talk about, and be involved with, as far as housing finance reform, is bringing the Fannie Mae and Freddie Mac conservatorships to an end and thinking about new infrastructure for the housing finance system—in particular the secondary mortgage market. One of the advantages of doing this at the Milken Institute is I get to think about some of these issues and place them in a larger context. For example, rather than simply thinking about how to promote homeownership or where we are with regard to homeownership, [I get] to think about homeownership in a larger context of family financial security, the state of family balance sheets, and the well-being of family. So I N D U S T R Y I N S I G H T / B R I A N H O N E A While now out of the FHFA hot seat, former Director Ed DeMarco still has plenty to say about the direction of housing policy. UNFINISHEDBUSINESS

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