Lockhart Moving to Mortgage Oversight Agency

Last week, our president named James B. Lockhart III to head up the Office of Federal Housing Enterprise Oversight (OFHEO). The Washington Post reports that he is initially coming on as acting director of the office that oversees Fannie Mae and Freddie Mac in order to start his new job as soon as possible. MarketWatch reports that Lockhart was a fraternity brother of the president’s while attending Yale University.

Reuters reports that Armando Falcon Jr. resigned from the post in May 2005 and Stephen A. Blumenthal has been the agency’s acting director. Blumenthal was Falcon’s deputy director.

His arrival will not delay the completion of the final report on the Fannie Mae accounting scandal. Upon confirmation by the Senate, Lockhart would become director of the OFHEO, according to the Washington Post.

White House spokeswoman Erin Healy told the Washington Post, “That’s why Bush designated Lockhart as ‘acting’ – so he can get down to business and not delay the report.” The Fannie Mae report is expected for release in mid-May.

Lockhart has been serving as deputy commissioner of the Social Security Administration since 2002 and has a background in finance, pensions, and insurance. He graduated from Yale and received his MBA from Harvard. Reuters reports that Lockhart was executive director of the Pension Benefit Guaranty Corporation between 1989 and 1993.

The Senate and House are currently considering their individual versions of legislation that would increase the oversight over the two housing finance corporations. The Washington Post reports that the White House, the Federal Reserve Board, and the Congress have mutual concerns that Fannie Mae and its smaller rival, Freddie Mac, with its own accounting problems, have become too large and present an unacceptable risk to the economy and taxpayers.

The Senate version limits the number of home loans that Fannie and Mae and Freddie Mac can keep. Those concerned argue that these investments serve to increase their profits supporting the companies’ stock price, instead of facilitating the companies’ purpose to ensure plentiful mortgage funding, according to the Washington Post.