Mel Watt, who took over the reins at the Federal Housing Finance Agency this January, plays his cards very close to his vest. Watt has been extremely low-key so far in his term as FHFA director, avoiding controversy and not tipping his hand regarding his intentions for Fannie Mae / Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC).
In the only public policy action taken so far in his tenure, Watt overturned a decision by his predecessor to up Fannie Mae and Freddie Mac’s loan fees. Watt defended his policy reversal by saying he wanted to thoroughly review the proposal to make sure it would not reduce mortgage availability.
Annual strategic plan delayed
The FHFA produces an annual strategic plan, which is typically released to the public sometime in the first quarter. The 2014 FHFA strategic plan has not been officially released yet, and the delay is starting to raise eyebrows and provoke questions.
“We have yet to see or hear Watt’s vision for housing finance,” said Clifford Rossi, a former exec at Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC) who is now a finance professor at the University of Maryland. “He is still getting up to speed.”
We will probably get our first good read on Watt’s intentions with the impending release of the FHFA’s annual scorecard, which gives targets and specific direction regarding Fannie and Freddie. The scorecard is also usually released in the first quarter. There has been no comment to date from the FHFA regarding a release date for the scorecard.
The scorecard specifies the fees the agency will charge this year, as well as the maximum loan guarantee amount, which has a direct correlation with the costs and availability of mortgages.
Fannie Mae, Freddie Mac major changes not likely
According to Reuters, sources inside the FHFA say it appears Watt is comfortable with the current direction of Fannie Mae / Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC) and they do not expect major policy changes over the near term.
At a private reception in D.C. honoring him on Feb. 27, Watt humorously described his work routine as “meeting all day and reading all night.”