HUD Secretary Donovan: Obama Can’t Fire DeMarco

If you’re a flaming liberal in Congress you view the Ed DeMarco-principal-reduction controversy as follows: Fire that Republican now! Of course, I have no idea if DeMarco is an R or a D, but one thing is certain: President Obama cannot fire the interim director of the Federal Housing Finance Agency. He’s a career civil servant, not a political appointee. And his job – as he’s stated many times over the past year – is to conserve the assets of Fannie Mae and Freddie Mac, two government controlled institutions that after losing a zillion dollars the past three years, are now once again earning money on an operating basis. DeMarco has stated that he sees benefits in opening the door to principal reductions on GSE loans but getting there would be a major hassle (my words) and by the time all is said and done it may be a wash. (And then there’s the issue of strategic defaults.) Thursday morning HUD secretary Shawn Donovan himself told reporters that Obama cannot fire DeMarco, citing his civil service status. Then again, Obama could appoint a new interim FHFA director and put DeMarco in an office with no phone or computer.