Departing Housing Agency Chief Hired by Financial Services Firm

The departing head of the federal agency that runs Fannie Mae and Freddie Mac will join a financial services firm focused on distressed investments next month.

James B. Lockhart III, director of the Federal Housing Finance Agency, will become vice chairman of WL Ross & Co., a New York company that buys billions of dollars in distressed companies and securities with hopes they can boost their value and sell them off.

WL Ross, run by billionaire Wilbur L. Ross Jr., is an affiliate of the massive financial services firm Invesco. WL Ross has made big bets on the mortgage market with its acquisitions of American Home Mortgage Servicing and other financial firms.

"With his extensive government experience, deep knowledge of the U.S. mortgage markets and strong background in public/private finance, Jim is ideally qualified to help expand the financial services portfolio of the funds we manage," Wilbur Ross said in a statement Wednesday.

As head of the FHFA and its predecessor agency the past three years, Lockhart has been at the center of prominent financial, legislative, legal and lobbying battles. He announced his resignation earlier this month.

He pushed Fannie Mae and Freddie Mac to fix their accounting systems after massive frauds earlier this decade. He fought with the firms' once-powerful corps of lobbyists as they tried to block Congress from granting his agency tougher powers. He finally won that battle last summer when Congress beefed up the FHFA's regulatory authority and decided to move under his agency's supervision the Federal Home Loan Banks, regional institutions that also play a role in funneling money to the mortgage market. link......