Edward J. DeMarco, who worked to shrink Fannie Mae (FNMA) and Freddie Mac (FMCC) as their U.S. overseer after the 2008 financial crisis, started a new job this week: senior fellow at the Milken Institute's Center for Financial Markets.

The career government employee says he'll still be pushing for an overhaul of the nation's housing-finance system in his position at the Washington office of the nonpartisan organization founded by financier Michael Milken and based in Santa Monica, California.

"While my time in government is over, my interest and passion for housing-finance reform being enacted remains strong and I'd like to contribute to that getting done," DeMarco, 54, said in an interview.

DeMarco's tenure as acting director of the Federal Housing Finance Agency from 2009 to 2013 was marked by controversy as he focused on fixing the bottom line of the two financially troubled mortgage-finance firms. Advocacy groups who wanted Fannie Mae and Freddie Mac to spend more money providing financial aid to struggling homeowners protested in front of his house in Silver Spring, Maryland.

Fannie Mae and Freddie Mac provide liquidity to the housing market by buying mortgages and packaging them into bonds on which they guarantee payments of principal and interest. Investments in risky loans pushed the companies to the brink of bankruptcy and they were taken into federal conservatorship in 2008. They required a $187.5 billion taxpayer bailout. They've since returned to profitability and have paid more than $218 billion to the U.S. Treasury.

DeMarco, an economist, has been warning of the risks the companies pose to taxpayers since he was a research fellow at the Government Accountability Office in the 1980s. Now, he said, lawmakers must decide their fate.

"That last chapter of conservatorship has got to be written by the Congress of the United States," he said. "I know it's hard, but it's got to be done."

Efforts to pass a bipartisan bill replacing Fannie Mae and Freddie Mac with a government reinsurer of mortgage bonds behind private capital have stalled in the Senate and are unlikely to move forward this year. DeMarco said that makes it harder for his successor at FHFA, former Democratic congressman Melvin L. Watt, to do his job.

"Director Watt has a big challenge," DeMarco said. "He needs the Congress and the administration to get together and solve this."

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