Obama picks new FHFA chief

U.S. President Barack Obama on Wednesday nominated Melvin Watt, a North Carolina Democrat, as director of the Federal Housing Finance Agency (FHFA), regulator of the country's two mortgage giants -- Fannie Mae and Freddie Mac. "Mel understands as well as anybody what caused the housing crises. He knows what it's gonna take to help responsible homeowners fully recover," Obama said during a nomination ceremony at the White House. Watt has been in Congress for 21 years and a longtime member of the House Financial Services Committee, which oversees the FHFA, Fannie Mae and Freddie Mac. If confirmed by the Senate, he would replace Edward Demarco, who has been the agency's acting director since 2009. "As the Administration works with Congress to reform the housing finance system, help responsible homeowners refinance their mortgages, and build new ladders of opportunity into the middle class, there is no one more qualified than Congressman Watt to lead the Federal Housing Finance Agency," U.S. Treasury Secretary Jacob Lew said in a statement. The nomination came as the U.S. housing market has maintained a steady recovery and become a bright spot in the economy. With Fannie Mae and Freddie Mac posting record profits for the year 2012, Watt is now in a better position to push for housing market reforms. Fannie Mae and Freddie Mac had asked for 190 billion dollars in aid from the U.S. government after they were put under conservatorship during the 2008 financial crisis. The two government-sponsored enterprises own or guarantee about half of all mortgages in the United States, or nearly 31 million home loans. Along with other federal agencies, they have backed nearly 90 percent of new mortgages over the past few years. The Obama administration delivered a report to Congress in 2011 about shrinking the government's role in the housing finance system. But Congress has yet to decide how to wind down the two mortgage giants.