(CNN Money) The next head of the Federal Housing Finance Agency will have quite the task waiting.
President Obama nominated Mel Watt, a Democratic congressman from North Carolina, this week to be the next head of the FHFA. Should Watt be confirmed by the Senate, he will play a critical role in shaping the future of the U.S. housing market.
Ever since the crisis hit in 2008, the FHFA has been in control of housing finance giants Fannie Mae and Freddie Mac, which own or guarantee more than half of all outstanding mortgages in the U.S., according to the Congressional Budget Office.
"This position is far more than just a regulator," said Bartlett Naylor, a financial policy expert with the advocacy group Public Citizen. "Anyone with a mortgage intersects with Fannie and Freddie and therein with what Mel Watt will be responsible for at the FHFA."
At the top of the agenda for the FHFA is the question of whether it will reduce loan balances for struggling borrowers whose mortgages are backed by Fannie and Freddie. The outgoing head of the agency, Ed DeMarco, has opposed calls from the Obama administration and progressive groups to move ahead with such reductions.
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