WASHINGTON -- The Senate voted 57-41 on Tuesday to confirm Rep. Mel Watt to head the agency overseeing Fannie Mae and Freddie Mac, ending a long battle by President Obama to install a regulator open to more aggressive action to help struggling homeowners.
Watt, a longtime Democratic congressman from North Carolina, will replace Edward J. DeMarco as director of the Federal Housing Finance Agency. President Obama nominated Watt in May.
"He’s the right person to protect Americans who work hard and play by the rules every day, and he’ll be the right regulator to make sure the kind of crisis we just went through never happens again," Obama said.
DeMarco has been the agency's acting director since 2009. He has drawn the ire of the Obama administration, congressional Democrats, officials in states hit hard by foreclosures and housing advocates for not allowing Fannie and Freddie to reduce the principal on mortgages they own or guarantee.
Republicans applauded DeMarco for his resistance to principal reductions, saying he was protecting the billions of dollars of taxpayer money pumped into Fannie and Freddie when the federal government bailed them out in 2008 and placed them under conservatorship.
Senate Republicans had successfully derailed one nominee to replace DeMarco. And in late October they had prevented a confirmation vote on Watt, arguing the housing regulator job required a technocrat, not a politician.
But Senate Democrats, saying they were fed up by Republican filibusters of Obama nominees, changed the chamber's rules last month. A simple majority of the 100-member Senate, not 60 votes, is now all that's needed to end a filibuster for all but Supreme Court nominees.
With the lower threshold, Watt was able to pass a key procedural vote Tuesday and then was confirmed. Two Republicans, Richard Burr of North Carolina and Rob Portman of Ohio, joined Democrats and the Senate's two independents in voting to confirm Watt.
Democrats and housing advocates cheered Watt's confirmation. But with foreclosure rates falling and the housing market rebounding, there is less of a need for principal write-downs.
"I believe that while the worst of the crisis is over, we still have many issues to overcome," said Rep. Maxine Waters (D-Los Angeles), a longtime colleague of Watt.
Watt takes over the agency as lawmakers in both parties work on reforming the housing finance system and replacing Fannie and Freddie.
The housing recovery has improved the finances of Fannie and Freddie dramatically.
The companies, near bankruptcy in 2008 because of the collapse of the subprime housing bubble, are now profitable.
The companies received about $187.5 billion in bailout money, but have needed none since early 2012. The bailout requires them to pay dividends on the money, and by the end of the year they will have paid the government about $185.3 billion.
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