Although he could allow principal loan reductions on Fannie Mae and Freddie Mac loans, President Obama’s nominee to head the regulator of the two secondary lenders has gained the support of mortgage bankers.
Obama nominated Rep. Melvin L. Watt (D-N.C.) in May to be the director of the Federal Housing Finance Agency. FHFA is the regulator and conservator of Fannie and Freddie.
Watt has previously expressed support for principal reduction on negative-equity loans owned or guaranteed by Fannie and Freddie — unlike Acting FHFA Director Edward J. DeMarco, who has frustrated the Obama administration with his opposition to such a move.
Watt’s potential senate confirmation, which has been delayed by GOP threats of filibustering, is supported by the Mortgage Bankers Association.
The trade group’s backing was expressed in a statement Wednesday from MBA Chairman E.J. Burke, who noted that the “critical leadership position” needs to be filled on a permanent basis after more than five years of conservatorship for Fannie and Freddie.
Burke, who noted that MBA has a longstanding relationship with Watt, said that his confirmation would allow the debate over the future of the government’s role in the mortgage market to advance.
MBS has reportedly had multiple opportunities to engage Watt since his nomination.
“Congressman Watt would bring considerable experience to the post of director,” Burke stated. “His two decades of work on the House Financial Services Committee gives him a strong base of understanding on a wide variety of public policy issues related to housing finance. This familiarity and understanding would serve him well in this new position.”
MBA is joined in its support of the nominee by the National Association of Home Builders, which in May issued a statement applauding his nomination.
“Rep. Watt brings years of experience to this position at a pivotal moment as our nation’s housing market recovers,” NAHB Chairman Rick Judson said in the statement. “NAHB looks forward to working closely with Rep. Watt to help address the many complex challenges facing the U.S. housing finance system upon his confirmation by the U.S. Senate.”
Both the NAHB and the National Association of Realtors have expressed concern about DeMarco’s plans to lower the conforming loan limit.
