Sen. Elizabeth Warren faced stiff pushback Thursday when she criticized the federal regulator in charge of Fannie Mae and Freddie Mac for not helping homeowners.
The Massachusetts senator’s accusations were “unfair and untrue and unjust and all of the ‘uns-‘ that I can think of,” Federal Housing Finance Agency Director Mel Watt told Warren in a heated exchange at a Senate Banking Committee hearing.
The two engaged in a tense back-and-forth over a 2016 program started by Watt to reduce the balances of some delinquent borrowers with home loan balances greater than the value of their houses.
The program was too late and too small given the magnitude of the crisis facing home borrowers, Warren argued.
Only about 33,000 borrowers were initially projected to be eligible for the program. Under questioning, Watt suggested Thursday that only a small fraction of that group might have benefited. The program could not have been bigger, he said, because he was required to balance considerations about the government-sponsored enterprises’ financial position against aiding homeowners.
When Warren compared the agency’s program unfavorably to the government’s efforts to bail out big banks in 2008, when “the money just flew out the door for the banks,” Watt objected strenuously.
“I certainly hope you’re not blaming me for that,” he said, before calling Warren’s accusations unfair.
Watt, who was appointed by former President Barack Obama in 2013, formerly was a Democratic congressman representing North Carolina who served on the House Financial Services Committee. In that role, he tried to advance legislation meant to prevent banks from giving borrowers home loans they could not repay, he said. He also later advocated for greater mortgage relief efforts from the Federal Housing Finance Agency, although he changed his stance when he took over at the agency.
Warren didn’t back down. Since Watt took over at the agency, few homeowners have been given “help,” she said. “I think that is shameful.”
