U.S. Senate to vote on housing nominee, confirmation likely-sources
WASHINGTON Dec 9 (Reuters) - The U.S. Senate will consider President Barack Obama's nominee to head the regulator that oversees taxpayer-owned mortgage financiers Fannie Mae and Freddie Mac this week, two Democratic Senate aides said, and he is expected to win confirmation.
A vote on Democratic U.S. Representative Mel Watt's nomination to head the Federal Housing Finance Agency could come as early as Tuesday, one of the aides said.
A change in leadership at the FHFA was likely to affect the trillion dollar U.S. mortgage market. Watt, a North Carolina Democrat, is considered more in line with the White House's economic goals than the current acting director, Edward DeMarco.
Analysts say his appointment could mean a reversal of some of DeMarco's policies, including a rule that prohibited Fannie Mae and Freddie Mac to reduce the principal balance on delinquent loans. DeMarco has led the FHFA in an acting capacity since 2009.
The Senate failed to advance Watt's nomination in October. He was backed by 56 of the 100 senators, below the 60 votes he would have needed to be confirmed to the post. But the Senate changed its rules last month to allow nominees like Watt to be approved with only a simple majority of 51 votes.
The filibuster marked the first time since the Civil War that the Senate denied a sitting member of Congress a executive branch position. But since he is supported by all 55 members of the Democratic Senate caucus, Watt should be easily confirmed this time.
Watt is expected to become an influential voice in the debate over the future of Fannie Mae and Freddie Mac.
Fannie Mae and Freddie Mac have drawn $187.5 billion from the U.S. Treasury since they were seized by the government in 2008 during the financial crisis.
But with the housing market recovery, the two companies are now posting record profits and sending billions of dollars in the form of dividend payments to the Treasury.
Both Republicans and Democrats want to wind them down and take steps to ensure taxpayers are never on the hook again, but Democrats want to ensure some government support for housing remains.
With Watt at FHFA, the administration could avoid any awkward political fights when it comes to expanding credit to borrowers. Analysts expect Fannie Mae and Freddie Mac would increase their refinance activity under his oversight.
Watt is a two-decade veteran of the U.S. House of Representatives and has the support of the Congressional Black Caucus, of which he is a member. He is also a member of the House Financial Services Committee, which oversees housing matters. While in Congress, Watt has pressed for increased access to credit for minority and low-income consumers.
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