Watt’s bid to head housing regulator an uphill climb

{mosads}Watt appeared before the panel alongside several other nominees, but was the clear focus of the hearing, garnering more questions than the other four picks combined.

At the close of the hearing, the takeaway was clear: Watt will have a hard time garnering much Republican support for his nomination. Committee Republicans were quick to say they liked Watt personally, but doubted his background made him the best fit to run the agency.

“Any nominee to this important position must be politically independent and have the necessary … expertise,” said Sen. Mike Crapo (R-Idaho), the ranking member on the panel.

“I’m not sure I know of anybody today in Congress that I would feel good about in this position,” Sen. Bob Corker (R-Tenn.) said.

Watt, who previously worked as an attorney and graduated from Yale Law School before joining Congress in 1993, said he understood housing from the “ground up,” and assured members technical concerns should not stymie his nomination.

“I think it requires good judgment above everything else,” he said. “I can get somebody to do the technician part, I can help them do it. You want somebody who is going to make good judgments about the technical work that’s going to be done here, and I think that’s what I bring.”

In response to Corker’s questions about his expertise, Watt became animated, saying he was tired of having his qualifications questioned.

“It’s hurtful to have been doing something for forty-plus years, be on a panel with people who most of whom could be my children and I’d be the person designated for ‘This guy’s not qualified,’ ” he said. 

Watt also shot down concerns he would answer to the White House as an independent regulator, saying he would put his record against anyone else in Congress when it came to political independence.

And the lawmaker became emotional in describing his own meager home growing up, telling lawmakers he grew up in a house that originally had no electricity or indoor plumbing. He wants to oversee the FHFA because of the critical role housing plays in everyone’s lives, especially as Congress is hoping to overhaul the housing market in the coming years.

“I was devastated when our housing finance system began to lose its way,” he said. “I can’t think of anything I’d rather do now than help build the bridge and facilitate the transition to a more reliable housing future.”

He also cited several times his efforts, as a member of the House Financial Services Committee, to crack down on predatory lending years before the housing bubble burst as proof that he had the background to overseeing much of the housing market.

If confirmed, Watt would replace Edward DeMarco, who has served as acting director of the FHFA since 2009. During that time, DeMarco has become a frequent liberal target, as those on the left contend that he has stymied efforts to provide more relief to struggling homeowners.

Republicans tried to pin down Watt on some of those initiatives, such as principal reduction and the seizing of underwater mortgages by eminent domain. Watt refused to rule out the ideas if he were heading the agency, but vowed that he would only move after considerable deliberation.

On eminent domain, Watt said he would defer to state and local governments considering the idea, but would refuse to allow taxpayers now backing Fannie and Freddie to suffer losses as a result.

Watt appeared alongside a pair of nominees to serve as commissioners for the Securities and Exchange Commission (SEC). Kara Stein and Michael Piwowar, a Democrat and Republican, respectively, looked set to sail to confirmation, facing few contentious questions from either party. Both are currently Senate aides who work for Banking Committee members.

Jason Furman also faced little opposition in his effort to become the next head of the Council of Economic Advisers, and the same could be said for Richard Metsger, nominated to join the National Credit Union Administration Board.

A committee aide said a vote on the nominees could come as early as July.