With Warren absent, lawmakers take it easy on housing agency chief

Democrats, including Sen. Jon TesterJonathan (Jon) TesterEMILY’s List president: Franken did 'right thing for Minnesota' Reforming veterans health care for all generations of veterans Trump and Republicans deliver gift that keeps on giving for Americans MORE (D-Mont.), also had kind words for DeMarco.

Sen. Elizabeth WarrenElizabeth Ann WarrenWarren: Trump is a 'racist bully' Poll: Oprah would outperform Warren, Harris against Trump in California Democrats continue to dismiss positive impacts of tax reform MORE (D-Mass.), who has been a harsh critic of financial regulators during her brief time on the panel, was not at the hearing. Warren was en route to Boston with President Obama to attend a memorial service for the victims of the Boston Marathon bombing.

In 2008, the FHFA took control of Fannie Mae and Freddie Mac in an effort to stabilize the plummeting market. DeMarco was named acting director the following year and has led efforts to stem the tide of foreclosures, in part through a set of loan modification programs.

Under pressure to end the government’s control of Fannie and Freddie, DeMarco and his team have developed a plan to wind down the conservatorship. But he said Congress must take the lead by passing legislation that could provide the framework for rules that would offer a picture of what the post-conservatorship world would look like and attract the necessary private investment capital.

“We view the way out of conservatorship is for the Congress of the United States and administration to get together on legislation that determines what the future looks like,” he testified. “Without a set of rules, people seem unwilling to dip their toe in the water."

The only significant criticism came from Sen. Jack ReedJohn (Jack) Raymond ReedLawmakers, political figures share their New Year's resolutions for 2018 Congress must provide flexible funding for owners of repeatedly flooded properties Senate panel moves forward with bill to roll back Dodd-Frank MORE (D-R.I), who chided DeMarco for blocking the companies, which back roughly half of the nation's home loans, from lowering the principals of loans of underwater borrowers.

"This was a fundamental rejection of what we all thought was going to be one of the most significant improvements, not only in the housing market, but in the overall economy," Reed said.

DeMarco countered that, because Fannie and Freddie are supported by taxpayer dollars, such a move would be different than a scenario in which a private lender decided to forgive a portion of the loan.

"I concluded ... pursuing that program is inconsistent with our mandate as conservator," he said.

Meanwhile, the Obama administration is reportedly considering well-known economist Mark Zandi to replace DeMarco as the FHFA's permanent director, which would require Senate confirmation.

The matter did not come up during Thursday's hearing.

This story was updated at 1:56 p.m.