The Senate Banking Committee Tuesday afternoon approved the nomination of Joseph Smith to be the next director of the Federal Housing Finance Agency (FHFA) by a 16-6 vote. However, several Republicans are planning to delay his confirmation by the full Senate.
Smith enjoys widespread support among industry groups. But Sen. Richard Shelby, R-Ala., the ranking Republican on the committee, voiced his concern that Smith may succumb to White House pressure, giving Fannie Mae and Freddie Mac the green light to writedown the principal of underwater mortgages that are still current and refinance homeowners into new FHA-insured mortgages.
The two GSEs have been in conservatorships since September 2008, soaking up $145 billion in aid from the U.S. Treasury. Shelby opposes principal writedowns by the GSEs, claiming they would increase their eventual losses which ultimately are borne by U.S. taxpayers.
Shelby voted against Smith. "He will be a tool of the administration cutting mortgages, throwing the bills to the taxpayers," he said.
After the vote, the Alabama senator said several members will place "holds" on the FHFA nominee to prevent a vote by the full Senate.