Senate majority leader Harry Reid, D-Nev., would like to call for a vote this week to confirm Rep. Mel Watt, D-N.C., to be the new GSE regulator, but it looks like a vote will be put off until September when the senators return from their August recess.
Speculation was building last week that Reid would schedule a vote on Watt and even use an extreme action—referred to as the “nuclear option”—to get Watt confirmed.
But there are several other confirmations Democratic leaders want to complete this week before the summer recess starts Aug. 5. And there is some notion that one or two key Republican senators may be willing to reach a deal on
But one source stressed that the situation is so fluid that a vote is still possible this week. “Don’t completely rule it out.”
Meanwhile, analysts and pundits are anticipating what policies would be in store if Watt is confirmed to be the new Federal Housing Finance Agency director. (Edward DeMarco is currently the acting FHFA director.)
Bank of America Merrill Lynch analysts expect Watt would extend the HARP program so that borrowers who took out a Fannie Mae or Freddie Mac loan before June 2010 could qualify for a HARP refi.
In designing the HARP program, DeMarco set the eligibility date for GSE loans originated before June 2009.
FBR Capital Markets financial policy analyst Ed Mills expects Watt would start a pilot program to test the effectiveness of principal reductions.
DeMarco nixed the concept of principal reductions on GSE loans after conducting an economic analysis. If confirmed, “Watt will redo the economic analysis to see if it makes sense,” Mills said.
