Obama picks veteran Watt as housing finance head

RALEIGH, N.C. (AP) -- President Barack Obama called on a Capitol Hill veteran seasoned in business, law and civil rights by naming U.S. Rep Mel Watt of North Carolina on Wednesday to head the federal regulatory body that oversees the two national mortgage lending behemoths behind most new mortgages.

Obama picked the 67-year-old Democrat from Charlotte to run the Federal Housing Finance Agency.

The agency oversees Fannie Mae and Freddie Mac, the companies taxpayers spent about $170 billion to rescue at the height of the financial crisis in September 2008 as the housing bubble popped. Fannie and Freddie together own or guarantee about half of all U.S. mortgages.

Now that the U.S. housing market is improving, foreclosures are declining, and Fannie Mae is coming off its largest ever annual profit in 2012, Obama may press for new reforms in the way American homes are financed.

Watt became the second North Carolinian tapped for a Washington post this week following Charlotte Mayor Anthony Foxx's nomination as transportation secretary.

As a House Judiciary Committee member, Watt has concentrated on intellectual property and competition issues. On the Financial Services Committee, the lawmaker from Bank of America's hometown focused on capital markets and consumer credit.

Some credit Watt with an influential role in the 2010 passage of the Dodd-Frank financial law overhaul. He also pushed for new regulations on aggressive lending and credit card consumer protections. He proposed extending oversight to auto dealers of the Consumer Financial Protection Agency responsible for making banks, credit card companies and mortgage lenders treat the average person fairly.

"The problem is going to be the confirmation process," Catawba College politics professor J. Michael Bitzer said. "He is definitely a liberal Democrat. The question is going to be, will the conservatives Republicans in the U.S. Senate use those kinds of things against him and refuse to move it ahead."

Watt's office did not respond to a request for an interview Wednesday.

U.S. Rep. Robert Pittenger, R-N.C., said he hopes his fellow Charlotte lawmaker will reduce the federal government's role in the housing market and increase opportunities for private investors.

"Mel Watt is a good man and a dedicated public servant. After two decades in Congress, I'm sure he's ready for a new challenge," he said.

Watt is the only congressman voters in the majority-black 12th District have known. He won the newly created seat in 1992 as one of two blacks sent to Congress that year from a state that had not sent one since 1901. Shaped like the letter Y, the 12th District has two fingers that reach south from Winston-Salem and Greensboro and connect in High Point before running roughly along Interstate 85 to Charlotte.

The U.S. Supreme Court four times preserved the district from challenges as an illegal gerrymander that tied together several city centers with skinny ribbons of countryside. The high court ruled it was OK to collect black voters for political motives into a district that tends to support Democrats.

Watt's re-election has rarely been threatened.

An honors graduate of the University of North Carolina at Chapel Hill with a business administration degree, Watt earned a law degree at Yale. A short stint after law school as a lawyer with the NAACP Legal Defense and Education Fund was followed by a return to Charlotte and 22 years of practicing law at his own firm, specializing in minority business and economic development.

He also latched his political future to African-American trailblazer Harvey Gantt, managing Gantt's campaigns for city council, Charlotte mayor and for U.S. Senate against hard-right icon and incumbent Jesse Helms in 1990. In between, Watt served a two-year term in the state Senate.

Though holding a safe congressional seat, House redistricting that favored Republicans in many states means Democrats would need to ride a political wave to reclaim control of the chamber, Bitzer said.

If Watt leaves his congressional seat, Gov. Pat McCrory would call a special election at least 90 days after the vacancy occurs. North Carolina law allows the governor to either order a party primary ahead of the election or simply ask the Democratic and Republican parties to each nominate a candidate, state elections board executive director Gary Bartlett said.

Democratic state Rep. Alma Adams of Greensboro said she'd seek Watt's seat if he is confirmed. Sen. Malcolm Graham, D-Mecklenburg, told the Charlotte Observer he's running. Rep. Marcus Brandon of High Point, the only openly gay member of the General Assembly, said he is leaning heavily toward running but won't make a final decision until next week.

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Emery Dalesio can be reached at http://twitter.com/emerydalesio.

Associated Press writers Michael Biesecker and Gary D. Robertson contributed to this report.