President Obama's pick to head Fannie and Freddie is content to see the mortgage giants killed off, it has been reported.
U.S. Representative Mel Watt - President Obama's nominee to oversee Fannie Mae and Freddie Mac - has told a Senate hearing that he would welcome current legislative proposals to kill off the government-sponsored entities, Reuters has reported. Early last week, a bipartisan bill was introduced which would replace Fannie and Freddie with a privately capitalized system. Watt told the Senate hearing he supported efforts to reform the mortgage system.
"The good news is that a broad consensus has emerged on the direction that our next steps must take us - towards a system driven by private capital that minimizes the risk to taxpayers," Watt said.
While Watt may have voiced support for popular efforts to see the U.S. government's role in the mortgage market reformed, his confirmation may face an uphill battle with Senate Republicans. Watt has implied that he could consider a proposal to reduce loan principals for underwater borrowers, Reuters said. But Watt vowed that, if confirmed, his decision on the matter would be "responsible".
"You should have no doubt that I will be a strong and aggressive advocate for the taxpayers in this role."