The White House has announced that it will tap Mel Watt, longtime North Carolina congressman and democrat, to lead the Federal Housing Finance Agency (FHFA) and replace embattled acting director Edward DeMarco. The nomination is subject to Senate approval. DeMarco has supervised Fannie Mae and Freddie Mac as acting director of the FHFA since 2009 and been roundly criticized for his refusal to allow principal reductions on GSE loan modifications. Putting Watt in the director’s position will likely give the White House more control over housing policy and will probably result in a reversal of the FHFA’s principal reduction policies. As a member of the House Financial Services Committee, Watt championed efforts to stamp out predatory lending and access to home loans for low-income borrowers and borrowers with “spotty” credit[1]. Watt’s nomination is the president’s second attempt to replace DeMarco. His first nominee, North Caroline banking regulator Joseph Smith, failed to get Senate approval after failing to convince senators that he was significantly independent from the White House.

 


[1] http://www.huffingtonpost.com/2013/05/01/mel-watt-fhfa-ed-demarco_n_3190105.html