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After months of speculation, President Obama named another potential replacement to take Edward DeMarco's place as head of the ""Federal Housing Finance Agency"":http://www.fhfa.gov/ (FHFA), the conservator for the GSEs.
[IMAGE]Obama announced Wednesday his nomination of ""Rep. Mel Watt"":http://watt.house.gov/ (D-North Carolina) to serve as FHFA's director, a role played by DeMarco since he was appointed acting director in August 2009.
Watt has represented his district for more than 20 years, having been elected in 1992. He serves as a member of the House Financial Services Committee and had a brief tenure in 2005-2006 as chairman of the Congressional Black Caucus.
In his time as a congressman, Watt has made it part of his mission to put a spotlight on predatory lending practices and to ensure access to mortgages for low-income borrowers and those with flawed credit histories.
""He's helped protect consumers from the kind of reckless risk-taking that led to the financial crisis in the first place. And he's fought to give more Americans in low-income neighborhoods access to affordable housing,"" Obama said in his personnel announcement. ""So Mel understands as well as anybody what caused the housing crisis. He knows what it's going to take to help responsible homeowners fully recover.""
What the president sees as an asset, however, critics point to as a major weakness, especially at a time when the economy is trying to recover from an era of poor lending.
""I could not be more disappointed in this nomination. This gives new meaning to the adage that the fox is guarding the hen house,"" said ""Sen. Bob Corker"":http://www.corker.senate.gov/public/index.cfm/ (R-Tennessee). ""The debate around his nomination will illuminate for all Americans why Fannie and Freddie failed so miserably.""
As the current acting director, DeMarco has been the subject of (sometimes furious) debate, largely due to his staunch opposition to principal reduction on mortgage loans. While DeMarco and his supporters reason that debt forgiveness may encourage consumers to avoid paying debts in order to get assistance, his opponents, maintain that his position stands in contrast with the administration's goals of foreclosure prevention and asset preservation.
While DeMarco's critics--which include New York Times columnist Paul Krugman and ""attorneys general"":http://www.themreport.com/articles/attorneys-general-call-for-demarcos-replacement-2013-03-18 from nine states--have been vocal in their calls to remove him from his post, the last effort to replace him failed when the nominee--Joseph Smith Jr., who now oversees servicers' adherence to last year's national mortgage settlement--withdrew in the face of Republican opposition.
