By Clea Benson | Bloomberg
Mel Watt, the regulator of Fannie Mae and Freddie Mac, met last month with about two dozen homeowners who owe more on mortgages than their properties are worth.
The Americans told Watt of their financial struggles in his Washington office for almost two hours as he contemplates one of the toughest decisions in his first year overseeing $4.5 trillion in mortgage debt backed by the two companies.
Seven years after the housing market collapse, about 8.7 million U.S. borrowers remain underwater, placing Watt at the center of a political fight over how, or whether, to help them. Democrats including Senator Elizabeth Warren have criticized Watt for delaying debt reductions to prevent more foreclosures, while government-controlled Fannie Mae and Freddie Mac post healthy profits. Republican lawmakers have found fault with his efforts to ease conditions for borrowers because of the potential cost to taxpayers.
