President Barack Obama’s choice to head the Federal Housing Finance Administration, Rep. Mel Watt (D., N.C.) said Thursday he has not yet decided whether Fannie Mae and Freddie Mac should allow reductions in mortgage principal to help financially stressed consumers hold on to their homes.
The announcement marks a pullback from his announced support in December.
When asked at a Senate Banking Committee confirmation hearing about his possible change of heart, Watt said that his constituents at the FHFA would be all U.S. taxpayers. In December, on the other hand, he was considering the best interest of the people in his district, many of whom were in danger of losing their homes, in part because they owed more than the properties were worth.
Watt also noted that, since December, property values have risen nationally and fewer homeowners are “under water.”
His credentials for the job came under strong attack from Republican Sen. Bob Corker of Tennessee, a chief architect of a proposal to replace Fannie and Freddie.
Corker said a “technician” needs to be in charge of the FHFA, which oversees trillions of dollars in mortgages. Watt shot back that it was technicians who misguided the housing market into the recession.