Senate confirms Preston as housing chief

WASHINGTON (Reuters) - The U.S. Senate confirmed Steve Preston as secretary of the Department of Housing and Urban Development (HUD) late on Wednesday.

Preston, head of the Small Business Administration, was nominated by President George W. Bush in April to replace HUD Secretary Alphonso Jackson, who resigned amid controversy over his role in awarding government contracts.

"The department requires strong leadership at a time when our housing market is experiencing a period of challenge and uncertainty," Bush had said when he introduced Preston as his nominee.

The number of homeowners defaulting on mortgages has ballooned in the past year, costing banks some $200 billion in write-downs and threatening to send the U.S. economy spiraling into a recession.

The number of foreclosures this year will likely top the 1.5 million seen in 2007, while construction and sales of new homes have dropped.

Jackson, who enjoyed close ties with fellow Texan Bush, was pressed to step down by lawmakers who argued the cloud over his role in federal contracts could make it harder for HUD to respond to the worst housing crisis in generations.

On Wednesday, the Senate also confirmed the appointments of 12 ambassadors and several officials at government departments including Homeland Security, Justice and Commerce.

(Writing by JoAnne Allen; Editing by John O'Callaghan)