A flurry of mixed reactions circulated after President Barack Obama announced his support to nominate a seasoned congressman to lead the Federal Housing Finance Agency (FHFA).
Obama strongly stands behind Rep. Mel Watt (D-N.C.) to take helm of the agency that oversees the government-sponsored enterprises Fannie Mae and Freddie Mac.
Watt, who was elected to the House of Representatives in 1992, grew up in Charlotte, N.C., in a single-parent home and became a gladiator for affordable housing based on his mother’s fight to provide for her family, according to Obama’s remarks.
He has been a member of the House Financial Services Committee since 1993 and has become a leader in housing policy, according to his website.
His experience and drive will help lead the FHFA as the housing market begins to heal, Obama said. “He’s helped protect consumers from the kind of reckless risk-taking that led to the financial crisis in the first place,” he said in his remarks. “And he’s fought to give more Americans in low-income neighborhoods access to affordable housing.”
The endorsement initiated an array of reactions from both sides of the aisle and across the industry.
If Watt can secure a Senate vote for the appointment, he will oust current FHFA acting Director Edward DeMarco.
Obama has received pressure in recent months to fire DeMarco after clashing with the administration on a proposal for writedowns on homes.
DeMarco, who has led the FHFA for about three years, recently announced the government’s goal to reduce the hand of the GSEs in the multifamily space this year by about 10 percent.
The chairman of the House Financial Services Committee, Rep. Jeb Hensarling (R-Texas) applauded DeMarco’s recent actions despite the fact that he’s been conflicting with the administration.
“Whoever sits in the FHFA director’s chair needs to continue DeMarco’s policies,” Hensarling said in a statement. “If they simply do whatever the administration wants, they will have failed.”
Rep. Scott Garrett (R-N.J.) also voiced concern in a statement issued Wednesday. Garrett noted he’s worked with Watt for the last decade and applauded his efforts as a “dedicated public servant” but cautioned that he doesn’t believe Watt is right for the position.
“Unfortunately, he can’t hide from his past positions on housing finance issues. Rep. Watt has two decades worth of votes, campaign contributions, and other legislative actions which show he doesn’t have the necessary qualifications for this job."
Senate Banking Committee Chairman Tim Johnson (D-S.D.) said in a statement he is confident Watt will be able to balance the protection of the taxpayers with helping to stabilize the housing finance system.
Rep. Maxine Waters (D-Calif.) also applauded the nomination, noting she’s worked with Watt throughout his 20-year career.
“We are at a crossroads in our economic recovery, and the FHFA must play a leading role in laying the groundwork for the long-term stability of the housing market,” Waters said in a statement. “Given that this is one of the most important challenges that we face as a nation, we need a man as thoughtful, well-informed, principled, and fair as Rep. Watt.”
Sheila Crowley, president and CEO of the National Low Income Housing Coalition, supported Obama’s selection. She noted Watt’s enthusiasm for the creation of the National Housing Trust Fund and his urge to help Americans find affordable housing.
“I also know that Mr. Watt will protect and expand the important role the secondary mortgage market has on ensuring an affordable and robust multifamily market as Congress proceeds with housing finance reform,” Crowley said in a statement.
David H. Stevens, president and CEO of the Mortgage Bankers Association, said should Watt become the leader of FHFA, he’s got some big issues to tackle.
“Freddie Mac and Fannie Mae have been in conservatorship for almost five years, far beyond what anyone envisioned in 2008,” Stevens said in a statement. “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 No. 1 priority.”
