(Adds party breakdown of votes)
By Elvina Nawaguna
WASHINGTON, June 25 A U.S. Senate panel on
Wednesday approved San Antonio Mayor Julian Castro to lead the
Department of Housing and Urban Development, clearing the way
for a final vote in the full Senate.
If confirmed in the post, as expected, Castro would be in
position to push the Obama administration's plan to wind down
mortgage finance giants Fannie Mae and Freddie Mac
, an effort that has stalled in Congress.
The Senate Banking Committee voted 16-6 to place Castro at
the helm of the agency in charge of U.S. housing at a time when
the market's recovery remains wobbly and still-tight lending
terms are making it hard for many Americans to obtain mortgages.
Lawmakers voted generally along party lines, with 12
Democrats and four Republicans voting to approve Castro's
nomination and six Republicans opposing it.
A graduate of Stanford University and Harvard Law School,
the 39-year-old Castro became the youngest mayor of a major U.S.
city when elected in May 2009. He has been praised for his
housing and development programs in the Texas city.
At a hearing on his nomination last week, Castro told
lawmakers the current U.S. housing finance system was not
working well for Americans. He said he would seek to make sure
taxpayers would not be on the hook again if another housing
crisis struck, as they were when the government stepped in to
rescue Freddie Mac and Fannie Mae in 2008.
Castro would replace Shaun Donovan, who was picked to lead
the White House budget office. Donovan had worked closely with
Senate Democrats on legislation to shutter the two mortgage
finance firms and revamp the housing finance system. Castro is
expected to pick up the baton and has told lawmakers he would
support their reform efforts.
At his nomination hearing, Castro also said he would ensure
the Federal Housing Administration, a troubled government
mortgage insurer under HUD that was forced to tap $1.7 billion
in taxpayer funds last year, would not need another rescue.
As the top U.S. housing official, he would be tasked with
making homeownership more affordable for low-income buyers.
The FHA, which aims to help first-time and low-income
borrowers, raised its mortgage insurance fees to bolster its
finances. That action locked out thousands of potential buyers,
and it now faces pressure to bring the fees down.
Castro told lawmakers it was possible to balance FHA's
mission of helping low-income borrowers with the need to keep it
Castro, who has the backing of industry groups such as the
Mortgage Bankers Association and National Association of
Realtors, is seen as a rising star in the Democratic Party. Many
view him as a potential 2016 vice presidential nominee.
(Reporting by Elvina Nawaguna; Editing by Paul Simao)