Watt to signal FHFA strategy shift: Analysts

by Adam Smith06 Jan 2014
As Mel Watt prepares to be sworn in as FHFA head, industry pundits have predicted his tenure will mark a shift in strategy toward wider credit access.

Watt is set to be sworn in today to take the reins of the FHFA, and The Wall Street Journal has reported that analysts believe Watt will prioritize widespread access to mortgages over shrinking the role of Fannie Mae and Freddie Mac. Watt previously said he would delay Fannie and Freddie loan-fee increases set to take effect in March, which were meant to spur private investors to compete with the GSEs. Compass Point Research & Trading policy analyst Isaac Boltansky has told The Wall Street Journal the delay marks a change in strategy for the FHFA.

"In this instance, a strategic pause is just as significant as a shift in policy," Boltansky said.

Michael Calhoun, president of the Center for Responsible Lending, told The WSJ Watt's tenure is set to be markedly different than the course chartered by departing head Edward DeMarco, with Watt looking to broaden access to mortgage credit.

"DeMarco had announced that he was in essence winding down. I think you will see Watt push private capital to come in, but he will not force Congress's hand by saying, 'I'm going to blow them up if you don't act.'"

COMMENTS

  • by Joe Heisler | 1/6/2014 9:57:57 AM

    Mr. Watts first order of business should be to undo the punitive MIP iincreases of the past 2 years and require lenders to actually follow FHA underwriting guidelines as a requirement for participating in the program.

  • by John O. | 1/7/2014 12:01:56 AM

    Mr. Watt, Please get the banks out of the AMC business. For the major banks to have ANY ownership interest in an AMC or appraisal Co. (LandSafe) is a conflict of interest. Bank owned AMC are ruining the appraisal business.

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