Fannie Mae (FNMA)

[obiterdictum]

Where's Watt?
FHFA scorecard should be marked tardy

Trey Garrison
April 17, 2014


http://www.housingwire.com/blogs/1-rewired/post/29712-wheres-watt

A question HousingWire has been hearing and asking is simply, “Where is Mel Watt?”

Watt was sworn into office Jan. 6 as director of the Federal Housing Finance Agency, and his only real public action so far, has been delaying a g-fee hike planned by outgoing FHFA Acting Director Ed DeMarco, who helmed the agency for its initial six years.

The DeMarco hike would have increased the base guarantee fee by 10 basis points for all mortgages securitized by Fannie Mae and Freddie Mac, which the FHFA oversees and which manage $5 trillion in mortgages.

DeMarco, who leaves his post at the end of April, has actually been more outspoken since January than Watt, making one last push for GSE reform, speaking at the Federal Reserve Bank of Atlanta.

Watt, meanwhile, has been conspicuously absent from Congressional hearings on GSE reform.

There’s been no word on his strategic vision, or what he thinks should be a priority in this troubled housing market, facing a rising affordability gap and much tighter lending standards

And the FHFA’s annual scorecard, usually released in the first quarter, is nowhere to be seen, though sources say that a draft copy was sent to the GSEs for review last month.

HousingWire contacted the FHFA to find out where the former 11-term congressman from North Carolina was, what was the status of the scorecard, and if he was, you know, feeling okay. Could we get him anything? Did he have any words of wisdom for the GSEs that rely on the FHFA’s guidance?

A spokesperson declined to talk on the record but said that Watt was reviewing the agencies and that word and the scorecard would be coming out soon. How soon? No answer. Then, “Sit tight.”

Alrighty then.

Some sources say Watt has no plans to change direction within the GSEs, and that there’s more of a focus on readying for whatever GSE reform – if any – that comes out of Congress.

Others say Watt is just challenged by the scope of the job before him.

“It’s a big difference to go from being one of 435 to being the one,” said Tim Rood, chairman of The Collingwood Group, and who formerly served as director and principal of Fannie Mae’s eBusiness Division.

Rood said Watt has been meeting with the GSE heads and staffers, hammering out the best way to move forward in a challenging political and housing environment.

“I expect he will be focusing on the component parts and how they should be treated differently – some co-opted, some privatized and some put into a co-operative shared by the industry – that comes from reform,” Rood said.

“From his perspective, he will want to see how…the spring buying season unfolds and seeing where he can address affordable housing issues, and whether to loosen credit standards,” he said.

Another source said that he believes Watt is still learning the complex housing and finance industry, and suggested the North Carolina lawyer may not have the experience or background for the leadership needed. Watt served on the House Financial Services Committee and a housing opportunities subcommittee, but not on the GSE subcommittee.

If indeed it’s taking this long for Watt to get up to speed, it does raise the question of whether Watt was the right choice for the job in the first place.

Either way, Watt formally takes the helm in two weeks. When he finally pops up, it will be interesting to see if he sees his shadow and if we’ll get six more years of conservatorship.