"We believe it is underappreciated how difficult it is to replace the head of FHFA," Mills wrote the day after President Obama won the election. "The statute establishing the agency requires any vacancy to be filled internally, all from positions held by individuals philosophically similar to DeMarco. The President can attempt to appoint a new director, but that requires Senate approval - something that will be difficult with Senate Republicans still with enough votes to block confirmations. A recess appointment is possible, but we have not had an official congressional recess in almost 2-years. The recess appointment of Richard Cordray to head the CFPB was different in that there was a vacancy, which does not exist here," Mills wrote.
Even if DeMarco is replaced, any new director would be limited by the charter governing FHFA oversight of government sponsored enterprises Fannie Mae (FNMA)and Freddie Mac (FMCC), according to Poggi. He contends the charter would have to be changed "before anything more material could likely be accomplished," to further spur refinancing, and that such a change "would take significant time."
Finally, Poggi argues the Obama Administration will be reluctant to tinker further with HARP. While the first revision of HARP (widely referred to as HARP 2.0) was a success, a second revision would likely spur MBS investors to demand higher coupons to compensate them for "the risk of constant government intervention."
Refinancing in 2012 is expected to total $1.2 trillion--a 28% jump from 2011, according to Oct. 24 forecasts from the Mortgage Bankers Association. The group expects that number to drop "to $760 billion in 2013 and $360 billion in 2014 as rates increase and fewer borrowers find it beneficial to refinance," according to the Oct. 24 statement.-- Written by Dan Freed in New York. Follow @dan_freed
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV