Obama’s housing nominee open to ending Fannie and Freddie

President Obama’s nominee for Housing secretary on Tuesday told the Senate Banking Committee he is open to shuttering the mortgage giants Fannie Mae and Freddie Mac.

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Senators expressed little opposition to San Antonio Mayor Julián Castro’s nomination for secretary for Housing and Urban Development (HUD), a job that would give him a major role in the push for reforms to the housing system.

Though he declined to endorse any specific legislative proposals, Castro said he supports ending the federal backstop that Fannie and Freddie now enjoy.

"I absolutely believe that there are better alternatives than what we have in place with this duopoly and with the conservatorship," Castro said.

That was enough for Sen. Bob CorkerRobert (Bob) Phillips CorkerPoll: More voters oppose Kavanaugh’s nomination than support it Ford opens door to testifying next week Police arrest nearly two dozen Kavanaugh protesters MORE (Tenn.), who said he will support Castro’s nomination.

"You will be involved in what happens with Freddie and Fannie," Corker told Castro at the hearing. "You were a little vague on your support of the bill, and you should be at this point, but relative to [Fannie and Freddie status quo] you agree with that 100 percent."

Corker and Sen. Mark WarnerMark Robert WarnerKey House Dem's objections stall intel bill as deadline looms Russia docs order sets Trump on collision with intel community Hillicon Valley: North Korean IT firm hit with sanctions | Zuckerberg says Facebook better prepared for midterms | Big win for privacy advocates in Europe | Bezos launches B fund to help children, homeless MORE (D-Va.) put forward a housing finance proposal that became the foundation for a bipartisan bill from Banking Committee Chairman Tim JohnsonTimothy (Tim) Peter JohnsonSenate GOP rejects Trump’s call to go big on gun legislation Court ruling could be game changer for Dems in Nevada Bank lobbyists counting down to Shelby’s exit MORE (D-S.D.) and Sen. Mike CrapoMichael (Mike) Dean CrapoHillicon Valley: Trump signs off on sanctions for election meddlers | Russian hacker pleads guilty over botnet | Reddit bans QAnon forum | FCC delays review of T-Mobile, Sprint merger | EU approves controversial copyright law Trump authorizes sanctions against foreign governments that interfere in US elections Cruz gets help from Senate GOP in face of serious challenge from O’Rourke MORE (Idaho), the committee’s ranking Republican.

"I believe that reform would be preferable to what we have in place now," Castro said in response to a question from Sen. Jon TesterJonathan (Jon) TesterNelson campaign to donate K from Al Franken group to charity Montana lawmakers cheer recommendation to ban mining north of Yellowstone Cook Political Report moves Texas Senate race to ‘toss-up’ MORE (D-Mont.). "If the nation were to experience another downturn and another housing crisis as we just experienced, for that reason I commend the committee for working toward a housing finance model that takes the taxpayers out of their position of first loss and puts the private sector in that position."

The committee approved the Johnson-Crapo bill last month on a 13-9 vote, with liberal Sens. Charles SchumerCharles (Chuck) Ellis SchumerTrump, GOP regain edge in Kavanaugh battle READ: President Trump’s exclusive interview with Hill.TV The Hill's 12:30 Report — Trump slams Sessions in exclusive Hill.TV interview | Kavanaugh accuser wants FBI investigation MORE (D-N.Y.), Sherrod BrownSherrod Campbell BrownSherrod Brown says he's 'not actively considering' running for president Election Countdown: Trump confident about midterms in Hill.TV interview | Kavanaugh controversy tests candidates | Sanders, Warren ponder if both can run | Super PACs spending big | Two states open general election voting Friday | Latest Senate polls Overnight Health Care: Senators target surprise medical bills | Group looks to allow Medicaid funds for substance abuse programs | FDA launches anti-vaping campaign for teens MORE (D-Ohio), Jeff MerkleyJeffrey (Jeff) Alan MerkleyOvernight Energy: Warren bill would force companies to disclose climate impacts | Green group backs Gillum in Florida gov race | Feds to open refuge near former nuke site Warren wants companies to disclose more about climate change impacts DHS transferred about 0M from separate agencies to ICE this year: report MORE (D-Ore.) and Elizabeth WarrenElizabeth Ann WarrenDemocrats opposed to Pelosi lack challenger to topple her More Massachusetts Voters Prefer Deval Patrick for President than Elizabeth Warren Trump's trade war — firing all cannons or closing the portholes? MORE (D-Mass.) opposing it because of concerns the legislation did not do enough to address affordable housing. The lack of liberal support likely killed the bill’s chances of receiving a floor vote this year.

"I fully understand though, as well, the concerns of folks with regards to the other part of the balance, which is access to credit," Castro continued in his response to Tester. "We have had a housing finance system in place that seeks to ensure opportunity for Americans with modest means who are credit borrowers."

Housing finance reform has been one of the largest financial regulatory issues left unresolved from the 2008 economic crisis. The government took control of Fannie and Freddie in September 2008 and gave them a $187.4 billion taxpayer bailout.

Now, eight years after the crisis, the government is still conservator. Further complicating the issue is that Fannie and Freddie have become profitable again and have paid back the bailout money.

Johnson asked Castro about a 2012 HUD inspector general report that found San Antonio had mishandled $8.6 million in HUD allocations to the city. Castro said the city returned $125,000 of that money, and that he had personnel removed who were involved with the decision.

Castro, a rising Democratic star who is often named as a potential vice presidential 2016 contender, had a packed crowd of about 50 people inside the Dirksen Senate Building, which is unusual for a Banking Committee confirmation hearing.

He was introduced by Sen. John CornynJohn CornynKey GOP senators appear cool to Kavanaugh accuser's demand Trump, GOP regain edge in Kavanaugh battle GOP mulls having outside counsel question Kavanaugh, Ford MORE (R-Texas).

Castro was joined by his family, including his twin brother, Rep. Joaquín Castro (R-Texas), who arrived late the hearing.

"You'll have to forgive him. He's the second-born twin and sometimes he's late," the mayor quipped of his brother's tardiness.

President Obama nominated Castro for HUD secretary because the current chief, Shaun DonovanShaun L. S. DonovanHouse Dems call on OMB to analyze Senate budget plan Overnight Finance: Dems turn up heat on Wells Fargo | New rules for prepaid cards | Justices dig into insider trading law GOP reps warn Obama against quickly finalizing tax rules MORE, has been nominated to lead the Office of Management and Budget.