The U.S. Senate has confirmed Carol Galante to head the Federal Housing Administration (FHA).
In a 69-24 vote Dec. 30, the Senate confirmed her as the next assistant secretary for housing and FHA commissioner. Galante has been leading the FHA on an acting basis for more than a year and joined the Department of Housing and Urban Development (HUD) in 2009 when President Obama appointed her as deputy assistant secretary for multifamily housing programs.
"Under Carol's stewardship as acting assistant secretary and Federal Housing commissioner, HUD launched and integrated the Office of Risk Management and Regulatory Affairs into the Office of Housing. In addition, she has worked to expand housing opportunities for elderly and disabled residents and launched HUD's new Office of Housing Counseling," said HUD Secretary Shaun Donovan. "Further, Carol directed FHA insurance programs, through which HUD provided critical liquidity in the market while balancing two core missions—preserving affordable mortgage financing options for underserved borrowers and protecting our still-fragile housing recovery."
Prior to joining HUD, Galante was president and CEO of BRIDGE Housing, one of California's top nonprofit affordable housing developers.
As FHA commissioner, she faces the enormous challenge of stabilizing the finances of an agency that insures lenders against losses. During its history, the FHA has insured more than 41 million single-family mortgages. But as losses continue to mount, some fear that the agency will need a taxpayer bailout.
A recent independent review determined that FHA's mutual mortgage insurance fund has a "negative economic value" of $16.3 billion, yielding a capital reserve ratio negative 1.44 percent. HUD officials point out that the figures do not account for new economic value generated after fiscal 2012, which is estimated to be $11 billion through the end of fiscal 2013.
Galante's nomination saw some resistance from Republicans, who argued that the current administration hasn't done enough to stem the agency's losses.
However, the housing veteran ultimately drew support from both parties to help set Obama's housing team for the next term.
Sen. Bob Corker (R-Tenn.), a member of the Senate Banking, Housing, and Urban Affairs Committee, voted for Galante.
"I'm as frustrated as anyone with the losses taking place at FHA and our failure to implement fundamental housing reform, but given Carol Galante's commitment to make important changes that will help return FHA to its original mission of making affordable loans accessible to qualified first-time home buyers, I voted to confirm her as an assistant secretary of housing and FHA commissioner," he said in a statement. "I look forward to working with her as she puts in place the reforms she has promised as well as others that are needed to get FHA back on track."