The Federal Housing Finance Agency is heading into unchartered territory with a new leader at its helm after U.S. Senators voted in favor of confirming Mel Watt to the FHFA director post.
Reactions from the housing industry, regulators and members of Congress came swiftly.
Much like the debates leading up to the hearing – Watt’s confirmation was met with praise and some pushback. Yet, all of the commentators wished him well and asked for comprehensive housing reform in some shape or form.
Forty-one senators still voted against Watt even though he received 57 votes, granting him official confirmation.
House Financial Services Committee Chairman Jeb Hensarling, R-Texas, gave his former colleague praise after his confirmation, but also suggested now is the time for the Obama administration to move forward with federal housing reform. He noted, it has been three years since the administration initially released a blueprint for reforming the housing finance system.
"I want to praise Ed DeMarco for the commendable job he has done as FHFA’s acting director,” Hensarling said. “DeMarco put the interest of hardworking taxpayers first, standing strong against intense political pressure in Washington to do the opposite."
He added, "It is also my hope that with a new FHFA director, the Obama administration will work with us on the need to create a sustainable housing finance system for our nation." Hensarling pointed to his PATH Act, comprehensive legislation that advocates for GSE and FHA reform.
The Mortgage Bankers Association also reiterated its support for Watt, highlighting his "more than two decades of work" in the housing industry. The organization would like to see the FHFA focused on the future securitization market.
“MBA looks forward to working with Director Watt on developing and implementing ideas to improve the function of the secondary mortgage market,” said MBA chairman E.J. Burke. "Fannie Mae and Freddie Mac have been in conservatorship for more than five years, and it’s well past time to move forward on reform. As Director of FHFA, Congressman Watt will have a historic opportunity to shape the secondary mortgage market and the government’s role in housing."
The National Association of Federal Credit Unions, which has been fighting regulations that treat smaller credit unions at a disadvantage, congratulated Watt, saying: “NAFCU has always appreciated his willingness to meet with credit unions and to hear their concerns."
Congresswoman Maxine Waters, D-Calif., alluded to the fact that a Watt-era at the FHFA may mean more aid for borrowers – with analysts already predicting the possibility of an expansion of the government’s refi program.
“I am elated that after months of uncertainty and obstruction, the U.S. Senate has finally confirmed Congressman Mel Watt to head the Federal Housing Finance Agency,” Waters said. “Mel Watt’s legislative work demonstrates an unwavering commitment to protecting consumers, expanding affordable rental housing, and providing prudent oversight of financial institutions. He will bring this expertise to his new role as overseer of the nation’s secondary mortgage markets.”
Rep. Scott Garrett, R-N.J., congratulated Watt and hoped publicly that Congress can now get serious about Fannie and Freddie reform. He also praised Ed DeMarco for his service to the agency, which began right after the FHFA was formed to oversee Fannie and Freddie in the wake of the financial crisis.
"Director DeMarco has done an outstanding job during his tenure as head of the agency and should be commended for his hard work and steadfast determination in protecting taxpayers by preserving and conserving the assets of the enterprises," Rep. Garrett said. "It has been an honor and privilege to serve with him during this challenging time."
And with that, the FHFA and housing finance sector entered a new era – one five years removed from the housing crisis, but still short of its lofty reform goals.