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Obama to Replace DeMarco at FHFA

posted by Alan White

with Mel Watt, according to an AP story today. Congressman Watt of North Carolina was a moving force behind Miller-Watt-Frank, the mortgage reform legislation that eventually found its way into Dodd-Frank financial reform. Given that our all-but-nationalized housing finance system is directed by this somewhat obscure agency, the occupant of this post can have a huge influence on the future direction of credit, housing and the economy.

If he is confirmed, Watt can be expected to make major changes to Fannie and Freddie policies, for example on principal write-downs and cracking down on mortgage servicer errors and abuses. Perhaps he could also begin to envision a more rational future assignment of the public and private roles in financing homes, in which public subsidy serves a public purpose and private capital carries the burden of its own credit risk.

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This is a yet another unconscionable Obama nomination. Oabama's cynicism seems to know no bounds.

As the AP reports: Watt represents the Charlotte area, home base of behemoth Bank of America Corp...

Hugh McColl, former Bank of America chairman and CEO, also welcomed Watt's nomination. McColl says he has known Watt for four decades, first meeting him through his brother-in-law, former Rep. John Spratt, D-S.C., who attended Yale Law School at the same time as Watt.

"What he brings to everything, doesn't matter the subject, is an open mind," McColl said. "He has clarity of thought."

Charlotte is a major banking center, and the top donors to Watt's political campaigns over the years have been bank political action committees and bank officials and employees.

Read more here: http://www.newsobserver.com/2013/04/30/2861753/ap-source-obama-naming-ncs-watt.html#storylink=cpy

Let's all pray Demarco takes Alfred Pollard with him.

This movie cannot possibly have a happy ending. Subprime housing ruined the economy once, and the very point of putting Watts in charge of the FHFA is to ensure a repeat, with no-money-down mortgages leading the charge.

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