Although Senate Republicans tried hard to block Watt’s confirmation, the North Carolina Democrat enjoyed broad support from industry groups, which felt he would take a more borrower-friendly position than current Acting FHFA Director Edward DeMarco. Republicans, meanwhile, questioned whether Watt had the experience to lead the agency.
MBA Chairman E.J. Burke, however, said Watt’s congressional service gave him the knowledge he would need to run the FHFA.
“Because he brings more than two decades of work on the House Financial Services Committee, he will have a strong base of understanding on a wide variety of public policy issues related to housing finance,” Burke said Wednesday. “MBA looks forward to working with Director Watt on developing and implementing ideas to improve the function of the secondary mortgage market.”
Burke also urged Watt to campaign for a continued government backstop in the mortgage market as Congress makes plans to wind down Fannie Mae and Freddie Mac.
“Transition to an improved system must retain and redeploy key aspects of the GSEs’ existing infrastructures, including certain operational functions, systems, people and business processes that have proven essential to the mortgage market’s smooth operation,” Burke said. “Specifically included in this new system must be an explicit government guarantee for mortgage securities, backed by a well-defined class of high-quality, single-family and multifamily mortgages; protection for taxpayers through deep credit enhancement that puts private capital in a first-loss position, with no institution too big to fail; and fair and transparent guarantee fees to create an FDIC-like federal insurance fund to serve as a backstop in the event of catastrophic losses.”
The head of the Mortgage Bankers Association on Wednesday became the latest industry leader to endorse the confirmation of Rep. Mel Watt as head of the Federal Housing Finance Agency.