Watt, a Democrat from North Carolina, was nominated by President
Many liberals have criticized DeMarco, saying he has not done enough to help struggling homeowners, and there have been widespread calls from California Atty. Gen.
DeMarco has not allowed bailed-out housing finance giants Fannie and Freddie to reduce the principal on mortgages they own or guarantee, a benefit that many Democrats and housing advocates said could aid underwater homeowners and reduce foreclosures.
The government seized Fannie and Freddie in 2008 to prevent their collapse. They play a major role in the housing finance system, owning or backing about 60% of all mortgages.
Obama has been trying to replace DeMarco for several years. But Watt is the second nominee to be blocked by Republicans, who like the job DeMarco has been doing and support his opposition to principal reductions.
Attempts to bring Watt's nomination to a vote by the full Senate failed Thursday as supporters were unable to muster the 60 votes needed to stop a threatened Republican filibuster.
The so-called cloture vote fell three votes short. Only two Republicans,
The White House, along with civil rights and housing groups, lobbied strongly for Watt in recent days.
"It is enormously disappointing that Republicans would filibuster this nomination of a highly qualified nominee," White House Press Secretary
Senate Majority Leader
Since their seizure, Fannie and Freddie have received about $188 billion in bailout funds. The firms have paid the Treasury about $146 billion in dividends on the bailouts.
Some Republicans also criticized the selection of a politician for a job they said was better filled by an expert on housing finance who could handle the expected dismantling of the firms.
"I hope the president will nominate a qualified technocrat with the expertise to play a constructive role in winding down Fannie and Freddie and modernizing our housing finance system," said Sen.
But Watt's supporters noted he is a veteran of the House committee that oversees housing finance issues.
"Mel has over four decades of experience on issues related to housing and housing finance," said Rep.
"Blocking the nomination of someone as qualified as Mel Watt has deprived the FHFA of a strong leader who is much needed to confront the challenges that lie ahead," she said.