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NEW YORK (
TheStreet) --The leadership shake-up at
Freddie Mac(FMCC) leaves the door open for a new management that might be willing to take a more active role in reviving the housing market, even if it comes at the expense of near-term losses.
Fannie Mae CEO Michael Williams announced on Tuesday that he would step down from his position once a successor is found, only three months after Freddie Mac CEO Charles Haldeman Jr. announced that he planned to leave his position in 2012.
The departures at the top leaves the government scrambling to find replacements to head the mortgage finance companies, at a time when some policy makers and
Federal Reserve officials are arguing for more action to stimulate housing and the economy.
The two agencies have cost taxpayers more than $150 billion since their takeover by the government in 2008. While they continue to play an outsized role in the housing market- underwriting more than 90% of all conforming mortgages in the country along with the FHA- the companies actively seek to minimize taxpayer losses, which is sometimes at odds with efforts to boost housing.
For instance, the Federal Housing Finance Agency, the regulator of the mortgage giants, last year sued 19 banks alleging violations of securities laws over the sale of mortgage-backed securities worth $200 billion during the crisis, a move that critics said only served to exacerbate the housing crisis as mounting lawsuits crippled banks' ability to extend home loans.
on housing last week, the Fed argued that Fannie Mae and Freddie Mac should take a more active role in boosting the housing market. While the companies are mandated to minimize losses to the taxpayer, the Fed argued that "some actions that cause greater losses to be sustained by the GSEs in the near term might be in the interest of taxpayers to pursue if those actions result in a quicker and more vigorous economic recovery."
Meanwhile, speculation that the Obama administration is looking to
replace Federal Housing Finance Agency director Edward DeMarco
with a "housing advocate" through a recess appointment has been gaining ground, amid expectations that the government will announce a massive refinancing program or some other housing stimulus package. Skeptics argue that the White House is unlikely to do so because it calls for extreme political maneuvering.