Senate Republicans Block Another Obama Nominee For Housing Agency
NEW YORK (TheStreet) -- Senate Republicans on Thursday blocked a vote on the nomination of Congressman Mel Watt (D., N.C.) to the head of the Federal Housing Finance Agency, regulator of housing giants Fannie Mae
The Senate voted 56-42 in favor of the nomination, falling short of the minimum 60 that would have paved the way for an easy and swift confirmation.
This is the second nominee to the FHFA that Senate Republicans have rejected. It has also raised eyebrows since few Congressmen get rejected for cabinet posts.
But the vote was expected to be controversial. Although Watt had the backing of influential groups such as the Mortgage Bankers Association and the National Association of Realtors, Senate Republicans have been wary of Watt's nomination and what he could bring to the table at the FHFA.
Conservative groups worry that Watt would favor a bigger role for the government in mortgage finance and would support relief measures such as principal reduction, which has been opposed by current FHFA acting director Edward DeMarco on the grounds that it created a moral hazard.
While DeMarco has clashed with the Administration on this issue, he has won the approval of many Republicans who see him as a technocrat who does not align himself with either party.
A new director for the FHFA is seen as a crucial step towards ensuring a smooth overhaul of the mortgage finance system as the government works to reduce the footprint of the housing giants. Fannie Mae and Freddie Mac along with the FHA back more than 80% of mortgages originated today, leaving the taxpayer on the hook for trillions of dollars' worth of loans.
Liberal groups expressed disappointment at the blocked cloture vote.
"Homeowners across the country have been waiting for more than six years for a new regulator to oversee Fannie Mae and Freddie Mac and deserved more from the Senate," National People's Action Campaign said in a statement.
-- Written by Shanthi Bharatwaj New York.
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