Mark Zandi, the chief economist for Moody's Analytics, has emerged as a contender to lead the Federal Housing Finance Agency as the White House searches for a replacement for Acting Direct Ed DeMarco, according to news reports.

Zandi, a registered Democrat, worked for Sen. John McCain's 2008 presidential campaign and has testified before Congress numerous times on housing issues, leading some analysts to believe he could win over the Senate Republican caucus and be confirmed.

"We are optimistic regarding Zandi's chances during the confirmation process but caution that those expecting a substantive shift in policy at the FHFA if Zandi is nominated and confirmed will likely be disappointed," wrote Isaac Boltansky, an analyst at Compass Point Research and Trading LLC.

The possibility that Zandi was being considered to run the agency that oversees Fannie Mae and Freddie Mac was first reported by MarketWatch.

Last month, Rep. Mel Watt, D-NC, appeared to be a front-runner for the job until Sen. Bob Corker, R-Tenn., said the agency needed a politically "neutral" leader and that he could not support a possible Watt nomination.

DeMarco, meanwhile, has faced intense criticism for his refusal to endorse the use of principal reductions on Fannie Mae and Freddie Mac loans, even for a limited number of delinquent homeowners. Some lawmakers have called for his resignation.

DeMarco has long argued that principal reduction will not provide the best return for the taxpayers who are responsible for losses at Fannie and Freddie, and that it would create bad incentives for homeowners who are current on their mortgages.

Still, it remains unclear whether Zandi, who has limited policy experience and supported President Obama's 2009 stimulus package, would also have a problematic confirmation process given the legal scrutiny by the Senate Banking Committee of credit rating agencies.

In an editorial in the Washington Post Saturday, Zandi appeared to be touting the White House's latest effort: pushing mortgage lenders to extend more credit to low- and moderate-income borrowers, even those with weak credit histories.

"Fannie and Freddie still are not promoting refinancing as aggressively as they should," Zandi wrote, in describing the Home Affordable Refinance Program, to help underwater borrowers refinance their homes, which was just extended until 2015.

"Washington needs to attract more private lenders back into the mortgage business," he wrote, adding that the "limbo status" of Fannie and Freddie "makes little sense," and the uncertainty about their fate discourages lending.

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