Here's a picture of Mel Watt:
Last week, the country’s biggest mortgage lenders scored a couple of key victories that will allow them to ease lending standards, crank out more toxic assets, and inflate another housing bubble. Here’s what’s going on:
On Monday, the head of the Federal Housing Finance Agency (FHFA), Mel Watt, announced that Fannie and Freddie would slash the minimum down-payment requirement on mortgages from 5 percent to 3 percent while making loans more available to people with spotty credit. If this all sounds hauntingly familiar, it should. It was less than 7 years ago that shoddy lending practices blew up the financial system precipitating the deepest slump since the Great Depression. Now Watt wants to repeat that catastrophe by pumping up another credit bubble. Here’s the story from the Washington Post:
“When it comes to taking out a mortgage, two factors can stand in the way: the price of the mortgage,…and the borrower’s credit profile.”
On Monday, the head of the agency that oversees the mortgage giants Fannie Mae and Freddie Mac outlined … how he plans to make it easier for borrowers on both fronts. Mel Watt, director of the Federal Housing Finance Agency, did not give exact timing on the initiatives. But most of them are designed to encourage the industry to extend mortgages to a broader swath of borrowers.[More]
Wikipedia says of Watt that
Melvin Luther "Mel" Watt (born August 26, 1945) is an American politician who has been Director of the Federal Housing Finance Agency since 2014. Previously he served as the United States Representative for North Carolina's 12th congressional district from 1993 to 2014. He is a member of the Democratic Party. An attorney from Charlotte, North Carolina, Watt also served one term as a state Senator and served as campaign manager for Charlotte Mayor Harvey Gantt.In 2013 white liberal Mike Lux of Democracy Partners a leftwing consulting firm, suggested in the Huffington Post that delays in Watt's confirmation were because of "racism".
On May 1, 2013, President Barack Obama nominated Watt as the next head of the Federal Housing Finance Agency, which among other agencies, administers or has oversight for the FHA, Fannie Mae, and Freddie Mac. The U.S. Senate confirmed Watt on December 10, 2013. [More]
Given how dramatic a break from history and tradition rejecting Watt would be, I've heard more than one person speculate that racism may be a part of the mix here (Watt is African-American). And given the new trend toward Jim Crow-style voting restrictions sweeping a lot of Republican states, and some of the signs and rhetoric seen at Republican/tea party rallies, you never know. But I believe that there is something else happening here: Wall Street greed. You see, Ed DeMarco, the acting director of FHFA, has been a huge friend to Wall Street bankers who have been resisting writing mortgage debt. By DeMarco consistently refusing to embrace such a strategy for FHFA, he has given big cover for the big Wall Street banks that are resisting doing very much of it themselves. …I don't think much of Wall Street's influence in politics myself, but if they worried that an African-American FHA head might loosen standards, well, it turns out they were right.
With a friend like this at FHFA, Wall Street doesn't want a new director of FHFA. They like things the way they are, and don't want a new sheriff in town. That is why Republicans are so willing to buck history and tradition, are so willing to stop the first African-American appointee to run FHFA to be confirmed. Republicans are happy to do another big favor to the Wall Street lobby.Time for Wall Street to Stop Blocking Mel Watt, October 30, 2013
As for racism, well, here's what Wikipedia has to say about racism and Mel Watt:
In 2004, Ralph Nader attended a meeting with the Congressional Black Caucus, at which Nader clashed with members of the caucus over his presidential bid. After the meeting, Nader alleged that Watt twice uttered an "obscene racial epithet" towards him. It was alleged that Watt said: "You're just another arrogant white man — telling us what we can do — it's all about your ego — another f—ng arrogant white man." Although Nader wrote a letter to the Caucus and to Watt asking for an apology, none was offered.[Nader Angers Congressional Black Caucus with Demand for Apology, by Hans Nichols and Peter Savodnik, The Hill, July 14, 2004]