FHFA finally has head as Watt confirmed

by Ryan Smith10 Dec 2013
President Obama’s pick to oversee Fannie Mae and Freddie Mac has been confirmed by the Senate.

The Senate voted Tuesday to confirm Rep. Mel Watt as the head of the Federal Housing Finance Agency. The motion passed 57-41, according Reuters, with only two Senate Republicans voting in favor of Watt's confirmation.

Republicans had blocked Watt’s nomination, saying the North Carolina Democrat lacked the experience to head up the FHFA, which oversees Fannie and Freddie. That changed last month when the Senate voted along party lines to eliminate Republicans’ ability to filibuster the president’s nominees – the so-called “nuclear option.”

Watt’s nomination has proved popular with industry groups; he’s been endorsed by the Mortgage Bankers Association, the National Association of Realtors and the National Association of Home Builders, along with numerous civil rights and housing advocacy groups. Many believe that as head of the FHFA, Watt would change the agency’s focus to give more aid to struggling homeowners. But most Senate Republicans seem to prefer Edward DeMarco, who’s served as the FHFA’s acting director since the departure of James Lockhart in 2009.

DeMarco is a controversial figure in the industry. His plan to decrease the maximum loan limits for Fannie Mae and Freddie Mac drew broad condemnation from mortgage industry groups and stoked the ire of lawmakers on Capitol Hill, who said DeMarco lacked the authority to make the cuts.

But DeMarco’s focus on profitability sits well with Senate Republicans, many of whom don’t think Watt is politically independent enough to be given the wide-ranging power the FHFA director enjoys.

“The director has virtually unchecked power to control two multi-trillion-dollar companies and through them the entire mortgage market,” Sen. Mike Crapo (R.-Idaho) said Tuesday.

But Watt shrugged the criticisms off as largely political, according to the Star.

“Every once in a while they’ll make some noises about qualifications. But no one felt they were saying that with a straight face,” he said. "This has been about politics, and a lot of it has been directed at this president.”
 

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