Senator Mark Kirk voted today against the nomination of Congressman Mel Watt of North Carolina as Director of the Federal Housing Finance Agency (FHFA), which regulates Fannie Mae and Freddie Mac. Despite Senator Kirk’s opposition, the nomination passed out of the Senate Banking Committee on a 12-10 party line vote and will proceed to the full Senate for a vote.
“We are deeply disappointed in Senator Kirk’s vote to block Mel Watt today,” said Dory Rand, president of Woodstock Institute. “Illinois homeowners need a fresh leader at the FHFA who has the vision to limit the pain caused by foreclosures and jump-start housing market investment. Consumer advocates and industry representatives agree that Mel Watt is clearly qualified to do that job. We urge Senator Kirk to reconsider his position when Watt’s nomination comes before the full Senate.”
Rep. Watt has deep housing market expertise that would make him an excellent FHFA director. Watt has actively served on the House Financial Services Committee for two decades, using his position to advocate for affordable housing, fair lending, and consumer protections. Before his tenure in Congress, Watt worked on real estate and housing issues as a Yale-educated economic development lawyer in North Carolina. His qualifications have attracted a diverse group of supporters, including housing industry representatives such as the National Association of Realtors and National Association of Home Builders as well as consumer advocates Sen. Elizabeth Warren and Americans for Financial Reform.
A replacement for Ed DeMarco, the current acting director of the FHFA, is long overdue. DeMarco has obstructed necessary policy changes that would have lessened the negative impact of the foreclosure crisis on families and communities alike. Specifically, he has barred Fannie Mae and Freddie Mac from allowing lenders to reduce principal on underwater loans, even in situations where it would prevent foreclosure. Negative equity is associated with higher likelihood of mortgage defaults. In a market where one in four mortgage holders is underwater, allowing principal reductions on Fannie- and Freddie-backed loans would keep more families in their homes and stabilize communities and the market alike.
Woodstock Institute for years has called for principal reductions to be allowed on Fannie and Freddie loans, and for a replacement for DeMarco when he continued to refuse to change FHFA policy even when principal reductions were demonstrated to save money for his agency. We believe Rep. Watt would enact more forward-looking policies on principal reduction as FHFA director.
“Illinois homeowners will not forget that Sen. Kirk voted against an FHFA leader who could fix the broken policies that led to unnecessary foreclosures and lost wealth,” said Rand.
For more information, contact Katie Buitrago at email@example.com or 312-368-0310.