Eric I. Hemel insists there's only "a tenuous connection" between his background as a thrift regulator and his success as an equity analyst.

But investors and colleagues say the dispassion that marked his tenure as director of policy and economic research at the Federal Home Loan Bank Board and the political savvy he gained in government have been hallmarks of his career on Wall Street.

"He's a bright and honest individual. He does his homework, and formulates his opinion based on fact," said James Barth, a finance professor at Auburn University, who was a visiting scholar at the Bank Board when Mr. Hemel was there. "It doesn't surprise me that he would do a good job."

Mr. Hemel is now the most accurate forecaster of government sponsored enterprises and private mortgage bank earnings, as determined by American Banker's Sharpshooter Survey.

The new survey, based on data compiled by Zack's Investment Research, ranked Mr. Hemel first in annual forcasting accuracy on the Student Loan Marketing Association from 1991 to 1994. He tied with Samuel Liss of C.S. First Boston for first place for Sallie Mae quarterly forecasts in 1995.

Also contributing to his first-place finish, Mr. Hemel ranked no worse than sixth place in annual and quarterly forcasting on the Federal Home Loan Mortgage Corp. and Federal National Mortgage Association, better known as Fredie Mac and Fannie Mae.

To have gained a reputation for integrity as a Bank Board official in the early 1980s was no small feat. There was tremendous political pressure on the agency to minimize the extent of the looming financial scandal.

But in an agency that officially continued to deny there was much of a problem for several years afterward, Mr. Hemel stood out from the crowd by encouraging research into the subject by Mr. Barth and Daniel Brumbaugh. The research produced the first accurate estimates of the potential cost of the problem.

"He could have easily said 'Look, I don't want you doing that type of research,' but he was very supportive," Mr. Barth said.

Mr. Hemel, a native of Chicago, came to Washington after receiving a Ph.D. in economics from Stanford University in 1979. He served on the staff of Sen. Patrick Moynihan, D-N.Y., and as the staff director of President Reagan's Council of Economic Advisers before joining the Bank Board.

He joined First Boston in 1987 as a thrift analyst and moved to Morgan Stanley & Co. in 1992.

"My focus of coverage has shifted continually," Mr. Hemel said. As thrift failures depleted that industry, Mr. Hemel shifted his focus to the government sponsored enterprises and private mortgage banks. Now that most of the mortgage banks he covered have been bought out, Mr. Hemel has added about 30 real estate investment trusts to his coverage list.

Mr. Hemel conceded that his political background has been a plus for him in covering Sallie Mae. He was one of the first to go negative on the stock in response to the direct-lending proposals of the Clinton administration.

Albert Lord, a director of Sallie Mae who was the chief financial officer when he first met Mr. Hemel, said of him: "I know when I worked with him he was very strong, particulalry in the political front."

"At one point, my view of Eric was positively colored," Mr. Lord added. "At a time when Sallie Mae was undergoing some difficulty, he gave me the forum to explain the situation that Sallie Mae was involved in. It had to do with a failed guarantor in the student loan business, and it was hammering Sallie Mae stock."

Mr. Lord said the session was mutually beneficial to Mr. Hemel's clients and the company. "As for his technical expertise, he's very strong," Mr. Lord said. "He's a very cerebral guy. He's very focused. I know you want him to like your stock, because he's got a strong following."

As of early last week, Mr. Hemel had an "outperform" rating on Sallie Mae, though he cautioned that the details of the budget bill that will affect the company had yet to be resolved.

He also has "outperform" ratings on Fannie Mae and Freddie Mac, based on the lack of competition in their business and a beneficial falling interest rate environment.

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