President Barack Obama’s nominee for director of the Federal Housing Finance Agency has been confirmed by the U.S. Senate.
Rep. Mel Watt (D-N.C.) was confirmed Tuesday as FHFA director by a Senate vote of 57 to 41.
As conservator and regulator, Watt will oversee Fannie Mae and Freddie Mac, which combined guarantee or own $5.1 trillion in mortgages.
Watt was nominated by Obama in May to permanently replace the acting FHFA director, Edward J. DeMarco.
But the nomination was held up by senate Republicans who see DeMarco as more in line with their own principles. So senate Democrats, who hold a majority, changed filibuster rules — paving the way for the confirmation of Watt and a host other Obama nominees.
Watt is expected take a softer stance on principal reduction on Fannie and Freddie loans — a move opposed by DeMarco.
DeMarco’s position had him at odds with Obama.
The Mortgage Bankers Association, which had already endorsed Watt once it became clear that he would be confirmed, reiterated its support for the new FHFA director.
“MBA commends the confirmation of Mel Watt as the next director of the Federal Housing Finance Agency,” MBA Chairman E.J. Burke said in a written statement. “Because he brings more than two decades of work on the House Financial Services Committee, he will have a strong base of understanding on a wide variety of public policy issues related to housing finance.”
Burke also thanked DeMarco “for working hard to address the major issues facing the real estate finance industry.”
Burke added that any secondary market transition needs to provide a more stable and competitive system for all lenders.
“Specifically included in this new system must be an explicit government guarantee for mortgage securities, backed by a well defined class of high quality, single-family and multifamily mortgages; protection for taxpayers through deep credit enhancement that puts private capital in a first-loss position, with no institution too big to fail; and fair and transparent guarantee fees to create an FDIC-like federal insurance fund to serve as a backstop in the event of catastrophic losses,” he said.
