Massachusetts Attorney General Martha Coakley is praising President Obama for reportedly planning to nominate US Representative Mel Watt, a Democrat from North Carolina, as the new director of the Federal Housing Finance Agency.
Wednesday afternoon, Obama is expected to name Watt as his choice to take over the agency that oversees mortgage giants Freddie Mac and Fannie Mae. The two companies own or guarantee about three-quarters of all residential mortgages in the country.
Watt would replace acting FHFA director Edward J. DeMarco, who has been criticized by Coakley and other attorneys general for failing to support mortgage principal write downs as way to help homeowners avoid foreclosure. Watt is a senior member of the House Financial Services Committee and former chairman of the Congressional Black Caucus.
“For too long, Fannie Mae and Freddie Mac have been a roadblock to progress for millions of middle class families. Today, President Obama is seeking a much-needed new direction at Fannie and Freddie that will benefit our nation’s homeowners and speed our economic recovery,” Coakley said in a statement. “Congress should choose progress over obstruction and act immediately to approve the President’s nominee.”
DeMarco was named interim chief of the agency in 2009, and stayed on in that capacity after Obama’s pick as permanent head failed to win approval from Congress. Coakley had criticized DeMarco for refusing to allow Freddie Mac and Fannie Mae to let borrowers who lost their homes to foreclosure, or who are at risk of losing their homes, buy them back at lower prices. The FHFA requires sales of troubled homes to be at “arm’s length,” meaning they can’t be sold back to the original borrowers. Agency officials have said the provision is meant to prevent fraud.