Watt was confirmed by the Senate last month by a vote of 57-41 after a bitter partisan battle over his nomination. Most Senate Republicans opposed Watt’s nomination, saying he lacked the experience to head up the FHFA, which oversees Fannie Mae and Freddie Mac. Most seemed to prefer DeMarco, who had served as acting FHFA director since the departure of James Lockhart in 2009.
But 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. He also announced a plan to increase the guarantee fees charged by Fannie and Freddie by an average of 11 basis points. Watt has already stated that he will delay the implementation of that increase until he can “evaluate fully the rationale for the plan and the plan's impact.”
Mortgage and housing industry leaders have long supported Watt, whom many believe will change the focus of the FHFA to giving more aid to struggling homeowners.
“Watt has got a reputation as being a no-nonsense kind of guy – a common sense, no-nonsense kind of guy,” Marc Savitt, president of the National Association of Independent Housing Professionals, said last month. “He’s all about the consumer, as he should be.”
Mel Watt was sworn in Monday as director of the Federal Housing Finance Agency, ending the controversial reign of acting FHFA head Edward DeMarco.