WE’RE HEARING that the Senate is bracing for a fight over the confirmation of Rep. Mel Watt to be the new GSE regulator. And the North Carolina Democrat has a good chance of being confirmed next week.
While Republican lawmakers continue to oppose his confirmation, Watt is a well-respected legislator who has served in in the House of Representatives for over 20 years. Voting against a fellow congressman is difficult to justify.
In addition, the Senate majority leader Harry Reid, D-Nev., appears willing to use the “nuclear option,” if the GOP continues to block Watt’s confirmation.
If triggered, the nuclear option would allow the Democrats to run over the minority party and approve every one of the president’s nominees with just 51 votes instead of 60. Currently, Republicans can filibuster and block any confirmation with 41 votes. (There are currently 54 Dems including two Independents who usually vote with the Democrats and 46 GOP members in the Senate.)
A recent truce between the two sides on this filibuster issue opened the door for the Senate to confirm Richard Cordray to be first director of the Consumer Financial Protection Bureau. GOP senators had blocked Cordray’s confirmation for two years.
Republican senators have their reasons for blocking Watt. He views principal reduction as viable option to help underwater borrowers. And he may start a pilot program to test the impact of principal reduction if given a chance.
They want to keep current acting GSE regulator Edward DeMarco at the Federal Housing Finance Agency. He has steadfastly opposed principal reduction on Fannie Mae and Freddie Mac loans despite strong pressure from the White House and Treasury Department.
Republican senators like Mike Crapo (Idaho) and Bob Corker (Tennessee) claim the next FHFA director should be a “technician” like DeMarco as opposed to a politician.
“The next showdown on the nuclear option is over Mel Watt,” said Ed Mills, a financial policy analyst at FBR Capital Markets.
The congressman is one of the few remaining controversial nominations, Mills noted. “I think the odds are now favoring Watt to get confirmed. We should have an answer one way or another next week.”
The Senate is in session all next week and starts its usual month-long August recess on Aug. 5. If a vote is delayed until September, it could make it tougher for Watt to get the FHFA director’s job.
“If he is not voted on next week, the odds significantly go down that he gets confirmed,” the FBR Capital Markets analyst said.
SHOUT OUT: The way to get out of this tepid recovery of the national and mortgage economies is for private firms to increase business and hire new people, we feel. (A job usually equals a repaid mortgage loan.) This week’s shout out is to LeaderOne Financial Corp. in Overland Park, Kan., which has added 108 net new hires since the beginning of the year. Way to go, president and chief executive A.W. Pickel III!
MOST READ/EMAILED: Jobs are a big story, whether added to or subtracted from. The most read and the most emailed item on our site this week was the same item, Kate Berry’s detailing of potential
OH, THOSE VINERS: Keeping on with our jobs theme, we decided to link to what looks like a sincere request for
BLOG OF THE WEEK: We liked John McDermott’s
Mark Fogarty is editorial director of the SourceMedia Mortgage Group and has been commenting on the mortgage market since 1984. Brian Collins is the group’s senior editor and D.C. bureau chief. He has worked the mortgage beat since 1988.
