President Barack Obama has tapped North Carolina U.S. Rep. Mel Watt to be the new director of the Federal Housing Finance Agency, where he would oversee regulation of Fannie Mae, Freddie Mac and the 12 Federal Home Loan Banks. Obama previously nominated North Carolina Commissioner of Banks Joseph Smith for the position in 2011, but Smith withdrew his name after facing strong resistance from Republicans. Watt may not fare better.
Conservatives argue that the 20-year congressman and the longtime member of the House Financial Services Committee is partially to blame for the subprime lending mess.
“I could not be more disappointed in this nomination. This gives new meaning to the adage that the fox is guarding the hen house,” Republican Senator Bob Corker said in a statement on the nomination. “The debate around his nomination will illuminate for all Americans why Fannie and Freddie failed so miserably.”
“Before any nominee should be considered for this post, regardless of their qualifications, the administration should explicitly lay out how they will unwind these entities.”
Watt’s deregulation of Fannie and Freddie came after the government-sponsored enterprises spent billions in his congressional district. “Freddie Mac has purchased $9.5 billion in mortgages made to an estimated 82,000 Charlotte-area residents,” Watt’s staff announced in 2002.
Many of those risky loans ultimately led to the housing bubble and financial crisis. Charlotte was among the hardest-hit areas of the country. The 6.09 percent foreclosure rate for the North Carolina city was more than double the national average of 2.85 percent, according to the Charlotte Observer. CNN.com listed Charlotte number five of the hardest hit foreclosure hotspots in America in 2011.
On ‘Wilkow’ Tuesday Andrew discussed the Watt nomination and rising house prices with Harrington Capital Management Founder Kyle Harrington, watch a clip from the segment below: