Even as Fan and Fred reinflate rapidly out of sight of everyone, there is a new nominee to head their "regulator," now going under the name of the Federal Housing Finance Agency (FHFA). He is Congressman Mel Watt, Democrat of North Carolina. Haven't heard of him? He is the representative from the most preposterously gerrymandered district in the country, NC-12, which snakes in a narrow band across half the state to take in portions of Greensboro, Winston-Salem and Charlotte.
More on the merits, Paul Sperry at Investors Business Daily in its July 29 edition has a long piece on Mr. Watts and FHFA. Watts is one of, if not the, leading advocates of "flexible underwriting" as a means of increasing home ownership among low income groups. IBD gives some of the history:
On the eve of the financial crisis, Watt actually proposed the creation of the regulatory agency he now seeks to run — only, he designed it not to reform Fannie and Freddie but to pressure them to underwrite even more affordable housing, exposing them to even more risk. The bill he co-sponsored with then-banking panel Chairman Barney Frank — the Federal Housing Finance Reform Act of 2007 — would have forced the federally backed mortgage giants to meet even tougher quotas for affordable lending, while contributing to an "Affordable Housing Fund" to rebuild blighted urban areas. "The real benefit of this bill is that it will provide a big stimulus for more affordable housing," Watt said at the time, ignoring concerns the agencies already were overexposed to low-income loans.