"Our nation's economy depends on a robust housing recovery and that recovery needs to include everyone," Elyse Cherry, CEO of Boston Community Capital, a non-profit community development financial institution said. "Mr. Watt's confirmation gives us an opportunity to refocus our policy to help the lower income, urban areas that are still struggling with housing prices that have not rebounded."
Policy at the GSEs might undergo some changes under Watt. DeMarco has been trying to actively reduce the dominance of the agencies. Even as late as Monday, he pushed for an increase in fees the agencies charge to guarantee mortgages in order to attract private capital.
DeMarco has also been considering the idea of lowering the limit on loans that the agencies would buy and securitize.
Housing policy analysts believe Watt might be more slow in implementing these changes in order to avoid disrupting the fragile mortgage market.Principal reduction might also be on the cards, though with the housing market recovering and negative equity falling, the urgency to do so has somewhat diminished. Still, the confirmation of Watt to the position should allow for greater clarity going forward in the mortgage and housing industry.
-- Written by Shanthi Bharatwaj in New York