President Obama announced on May 1 that he will nominate Rep. Mel Watt, D-N.C., to lead the Federal Housing Finance Agency. As the head of the FHFA, Watt will have regulatory authority over Fannie Mae and Freddie Mac.
“We’re starting to see some bright spots in one of the most important parts of our economy,” Obama said. “But I think everybody understands we’ve still got more work to do. We’ve got more folks to help. We’ve got responsible homeowners who have never missed a payment, but aren’t allowed to refinance. We’ve got working families who are doing everything right, but still owe more on their homes than they’re worth. We’ve got young people who are trying to start a family and get into the housing market, and have seen difficulties in terms of financing. In the meantime, I’ll keep taking whatever steps I can administratively on my own. And one of the best things I can do is to nominate Mel Watt to lead the Federal Housing Finance Agency.”
Watt was elected to the U.S. House of Representatives in 1992. Before that, he was an attorney at a general practice law firm, specializing in minority business and economic development law. He received a Juris Doctorate from Yale University Law School and a Bachelors of Science from the University of North Carolina at Chapel Hill.
Watt has served on the House Financial Services Committee since he was elected and also serves on two subcommittees: the subcommittee on Financial Institutions and Consumer Credit and the subcommittee on Insurance, Housing and Community Opportunity.
“Mel understands as well as anybody what caused the housing crisis,” Obama said. “He knows what it’s going to take to help responsible homeowners fully recover.”
“I applaud President Obama’s nomination of Rep. Mel Watt to be the director of the Federal Housing Finance Agency,” U.S. Housing and Urban Development Secretary, Shaun Donovan, said in a statement. “Mel brings to this position more than twenty years of expertise on the House Financial Services Committee and two decades in the private sector as a small business owner. He has a proven track record of fighting to rein in deceptive mortgage lenders, protect consumers from abusive financial practices, and expand affordable housing, as well as to generate bipartisan cooperation to find common ground on key issues. I look forward to working with Mel in our efforts to continue to strengthen the housing finance system and increase economic opportunity for American families.”
“Congressman Watt has been an active player in housing policy for the last decade and, if confirmed, has a big job ahead of him,” Mortgage Bankers Association President and Chief Executive Officer, David Stevens, said. “Freddie Mac and Fannie Mae have been in conservatorship for almost 5 years, far beyond what anyone envisioned in 2008. It is time to begin transitioning these companies, creating a strong secondary mortgage market that relies first and foremost on private capital with a limited government guarantee that can function for the long term. That needs to be the FHFA director’s number one priority.”
There are some indications that the Senate Republicans will block Watt’s confirmation.
“I could not be more disappointed in this nomination. This gives new meaning to the adage that the fox is guarding the hen house,” Sen. Bob Corker, R-Tenn., said in a statement. “The debate around his nomination will illuminate for all Americans why Fannie and Freddie failed so miserably. Before any nominee should be considered for this post, regardless of their qualifications, the administration should explicitly lay out how they will unwind these entities.”