Melvin Watt, the overseer of Fannie Mae and Freddie Mac, broke five months of silence to help boost lending as slowing sales threatens the housing recovery, Bloomberg News reported today. Watt, in his first speech as director of the Federal Housing Finance Agency, announced new rules to reduce the risk that lenders will have to repurchase bad mortgages. The changes, designed to allow banks to relax credit standards, probably will increase housing sales by 5 percent this year, said Stephanie Karol, an economist at Englewood, Colorado-based research firm IHS Inc. A combination of tight credit, rising home prices and a retreat by investors has dragged down the market. Sales of existing homes fell to a 20-month low in March, according to the National Association of Realtors.
