Mel Watt Has Signaled a Major Housing-Policy Shift

 

 

Rep. Mel Watt won’t be sworn in as the director of the Federal Housing Finance Agency until Monday, but he has already sent a clear signal of the coming shift in direction from his predecessor Edward DeMarco, the agency’s acting director for the past four years.

Last month, Mr. Watt announced that he would immediately delay a series of loan-fee hikes, announced in December by the FHFA, once he was sworn in as the agency’s director on Jan. 6. The FHFA had announced those fee hikes on the eve of Mr. Watt’s confirmation by the U.S. Senate, and the increases provoked strong industry blowback after more details were released by Fannie MaeFNMA -1.01% and Freddie MacFMCC -1.74% one week later.

Mr. Watt’s announcement signals that access to mortgage credit is likely to ride shotgun ahead of other competing policy goals, such as reducing the firms’ footprint in housing markets, a top priority of the FHFA in recent years. Mr. DeMarco has often been called the most powerful man in housing through his role overseeing Fannie Mae and Freddie Mac, the government-supported mortgage companies that backstop around half of all U.S. home loans. Consequently, Mr. Watt’s confirmation as the FHFA’s director could presage the largest potential shift in housing policy since the companies were taken over by the government in 2008.