WASHINGTON, Dec 9 (Reuters) - The U.S. Senate will considerPresident Barack Obama's nominee to head the regulator thatoversees taxpayer-owned mortgage financiers Fannie Mae and Freddie Mac this week, two Democratic Senate aidessaid, and he is expected to win confirmation.
A vote on Democratic U.S. Representative Mel Watt'snomination to head the Federal Housing Finance Agency could comeas early as Tuesday, one of the aides said.
A change in leadership at the FHFA was likely to affect thetrillion dollar U.S. mortgage market. Watt, a North CarolinaDemocrat, is considered more in line with the White House'seconomic goals than the current acting director, Edward DeMarco.
Analysts say his appointment could mean a reversal of someof DeMarco's policies, including a rule that prohibited FannieMae and Freddie Mac to reduce the principal balance ondelinquent loans. DeMarco has led the FHFA in an acting capacitysince 2009.
The Senate failed to advance Watt's nomination inOctober. He was backed by 56 of the 100 senators, below the 60votes he would have needed to be confirmed to the post. But theSenate changed its rules last month to allow nominees like Wattto be approved with only a simple majority of 51 votes.
The filibuster marked the first time since the Civil Warthat the Senate denied a sitting member of Congress a executivebranch position. But since he is supported by all 55 members ofthe Democratic Senate caucus, Watt should be easily confirmedthis time.
Watt is expected to become an influential voice in thedebate over the future of Fannie Mae and Freddie Mac.
Fannie Mae and Freddie Mac have drawn $187.5 billion fromthe U.S. Treasury since they were seized by the government in2008 during the financial crisis.
But with the housing market recovery, the two companies arenow posting record profits and sending billions of dollars inthe form of dividend payments to the Treasury.
Both Republicans and Democrats want to wind them down andtake steps to ensure taxpayers are never on the hook again, butDemocrats want to ensure some government support for housingremains.
With Watt at FHFA, the administration could avoid anyawkward political fights when it comes to expanding credit toborrowers. Analysts expect Fannie Mae and Freddie Mac wouldincrease their refinance activity under his oversight.
Watt is a two-decade veteran of the U.S. House ofRepresentatives and has the support of the Congressional BlackCaucus, of which he is a member. He is also a member of theHouse Financial Services Committee, which oversees housingmatters. While in Congress, Watt has pressed for increasedaccess to credit for minority and low-income consumers.
- Politics & Government
- Freddie Mac
- Fannie Mae
- Fannie Mae and Freddie Mac
- President Barack Obama