Senate Banking Committee Chair Richard Shelby’s (R.-Ala.) declaration on Wednesday that Fannie Mae and Freddie Mac will likely remain in U.S. conservatorship shifts the task of reducing taxpayer mortgage risk mostly to Mel Watt, director of the Federal Housing Finance Agency, Bloomberg News reported yesterday. Shelby snuffed out any chance that Congress would overhaul the $11 trillion housing-finance system in the 114th Congress. President Barack Obama’s insistence on a continued government role in supporting the housing market puts him and fellow Democrats at loggerheads with the powerful banking chairman. That increases pressure on Watt, director of the Federal Housing Finance Agency, to accelerate regulatory efforts to remake Fannie Mae and Freddie Mac — under rules of a crisis-era conservatorship that’s heading into a seventh year.
