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Obama again mulls Smith as housing regulator: sources
January 20, 2011 / 11:16 PM / 7 years ago

Obama again mulls Smith as housing regulator: sources

WASHINGTON (Reuters) - U.S. President Barack Obama is leaning toward renominating Joseph Smith to oversee mortgage finance giants Fannie Mae and Freddie Mac, three sources familiar with the process told Reuters.

Obama late last year tapped the commissioner of North Carolina’s banks to be the director of the Federal Housing Finance Agency, a position requiring Senate confirmation.

The Senate Banking Committee in mid-December voted 16-6 to approve Smith for the post but the full Senate did not act on his nomination and it died when Congress adjourned its session in late December.

The sources said the timing of a renomination announcement was unclear. Smith is likely to face an uphill battle again.

Should he win the post he would replace Edward DeMarco, who has been FHFA’s acting director since September 2009.

The regulator of Fannie Mae and Freddie Mac is the chief conservator of the two firms since they were taken over by the government in late 2008 and is responsible for minimizing taxpayer losses.

Fannie Mae and Freddie Mac have taken more than $150 billion in direct taxpayer aid since the Bush administration seized them amid mounting losses from non-performing loans.

Alabama Senator Richard Shelby, the Senate banking panel’s top Republican, voted against Smith’s nomination in committee and called him “a tool of the administration, cutting mortgages, throwing the bill to the taxpayers.”

Even if the committee backs the nomination one more time, it is not clear how the administration will clear the hurdles that blocked his nomination last year. Under Senate rules, a single senator can place an anonymous hold on a nomination.

In addition, the hand of minority Republicans is stronger in the Senate this year than last. Democrats now control the chamber 53-47, compared to last year’s 59-41 split.

Treasury Secretary Timothy Geithner is expected to unveil the Obama administration’s long-term plan for the two firms in the next weeks.

Reporting by Corbett B. Daly; Editing by Andrew Hay

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