Watt Faces Senate Skeptics, Confirmation Unclear
Charlotte Congressman Mel Watt's path to become the next head of the agency that oversees mortgage finance remains unclear after his senate confirmation hearing in Washington on Thursday.
Watt doesn't have much in the way of technical mortgage expertise to run the Federal Housing Finance Agency, so he focused his opening remarks on his humble beginnings, even choking up over his early childhood home that had no indoor plumbing.
"I also get emotional when I recall watching them drill the well on that lot so we could have running water for the first time – and helping my Uncle Leonard dig the septic tank lines so we could have a bathroom inside," said Watt, in a quavering voice.
But his warm-fuzzy comments and two decades of service in Congress did little to persuade his critics on the Senate Banking Committee.
"I'm all for politicians going on to do great things," said Republican Bob Corker of Tennessee, "but I really thought because of the nature of it this was a job that needed a real technician."
The Federal Housing Finance Agency was created when the government took over Fannie Mae and Freddie Mac in 2008. As banks make home loans to customers, Fannie and Freddie buy those mortgages so banks can turn around and lend more money.
Many Republicans would prefer to see the Federal Housing Finance Agency's acting administrator stay in the post. They worry Watt, a Democrat, will bring a social agenda to the job. Watt defended his qualifications.
"I can get someone to do the technician part," said Watt. "You want somebody who's gonna make good judgments about the technical work that's being done here and that's what I can bring to this position."
Watt's nomination may end up a casualty of the political divide over Fannie and Freddie's future. Many Republicans want to dissolve the two agencies and let the private sector take over. They also want banks to stop forgiving portions of mortgages to help prevent foreclosure. "Principal reduction" as it's called, may help homeowners, but the taxpayer ends up footing the bill if Fannie or Freddie owns the mortgage.
Watt struggled to walk a neutral line on those topics and will have to do quite a bit more dancing if he's to win confirmation. The Senate has not scheduled a vote on his nomination.