Report: Housing agency chief Lockhart to step down

WASHINGTON -- The head of the federal agency that regulates mortgage finance companies Fannie Mae and Freddie Mac is stepping down.

The timing of James Lockhart's departure from the Federal Housing Finance Agency is not yet certain and a successor hasn't been named, according to an administration official who spoke on condition of anonymity Wednesday because the announcement was not yet formal.

Lockhart is a longtime friend and Yale fraternity brother of former President George W. Bush. He has been the director of FHFA and its predecessor, the Office of Federal Housing Enterprise Oversight, for about three years.

Lockhart, 63, could not immediately be reached for comment Wednesday afternoon.

Lockhart urged tighter government restrictions on the two companies, which operated with a far smaller financial cushion than other institutions. But by the time Congress acted last summer, it was too late.

Fearing the companies would soon go under, the government seized control of them in September. Since then, Freddie has tapped nearly $51 billion in government aid to cope with mounting loan defaults, while Fannie has taken about $34 billion.

The two companies play a vital role in the mortgage market by purchasing loans from lenders and selling them to investors, or holding them on their own books. Together, the companies own or guarantee almost 31 million home loans worth about $5.4 trillion. That's about half of all U.S home mortgages.

With foreclosures continuing to surge, Fannie and Freddie's goals have shifted over the past year. They are now playing a key role in the administration's effort to modify or refinance up to 9 million home loans.

Lockhart presented some options for how Fannie and Freddie should operate, but has not given a specific recommendation.