Watt Confirmed as FHFA Director

Following a play by Democrats to defang Republicans’ filibuster powers, the U.S. Senate voted Tuesday to confirm Rep. Mel Watt (D-North Carolina) as director of the Federal Housing Finance Agency (FHFA).

The vote concludes a debate that started in May, when President Obama nominated Watt to replace Edward DeMarco, who has served as FHFA’s acting director since 2009. The confirmation vote first went to the Senate floor at the end of October but lacked the votes to go forward.

On Tuesday, the vote went 57-41 in Watt’s favor, the Wall Street Journal reports. All Senate Democrats voted in favor of confirmation; they were joined across the aisle by Sens.

Rob Portman (R-Ohio) and Richard Burr (R-North Carolina).

With Watt’s confirmation, analysts at Barclays anticipate another discussion on the topic of principal forgiveness—a move DeMarco has famously opposed, earning praise and criticism alike—and another possible extension of the Home Affordable Refinance Program (HARP).

While Barclays noted Watt’s support for the administration’s housing policies may represent a “policy risk,” analysts for FBR Capital Markets say a more supportive approach to borrowing could be a boon for credit availability.

Mortgage Bankers Association (MBA) chairman E.J. Burke praised the confirmation vote on behalf of the group.

“MBA commends the confirmation of Mel Watt as the next director of the Federal Housing Finance Agency. 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 said, at the same time thanking DeMarco for his work.

“MBA looks forward to working with Director Watt on developing and implementing ideas to improve the function of the secondary mortgage market,” Burke added.

 

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