Carol Galante, who has been acting commissioner of the Federal Housing Administration for 17 months, may be on track to U.S. Senate confirmation after Tennessee Republican Bob Corker dropped his opposition today.
Corker, who publicly criticized Galante’s leadership of the financially troubled government mortgage insurer just a week ago, released a statement saying he had received a letter from her that convinced him she would improve the agency’s finances.
“Given the reforms she is committed to, I believe that having an accountable commissioner with her resolve and expertise will be in the best interest of the taxpayer,” Corker said in a statement.
The agency, which backs $1.1 trillion in U.S. home mortgages, last month revealed it was facing a projected shortfall of $16.3 billion in the value of its insurance fund because of defaults on loans it insured as the housing market collapsed.
In her letter, which Corker released, Galante, 58, provided more details of some steps the agency will take to improve its bottom line.
The FHA will soon limit borrowers with credit scores under 620 to debt that’s worth no more than 43 percent of their income unless they make a large down payment or have other money in reserve, Galante wrote.
The FHA will also limit the size of reverse mortgages that enable senior citizens to borrow against the equity in their homes and make larger loans more expensive, she said.
It wasn’t clear whether Corker’s change of heart may give Galante the votes she needs to be confirmed. The Senate Banking Committee on Dec. 13 gave preliminary approval for the appointment.
Other Republicans, including David Vitter of Louisiana, remain actively opposed to her confirmation.
“The latest independent actuary’s report makes clear that a taxpayer-funded bailout of FHA is virtually inevitable,” Vitter said today in a statement. “Ms. Galante’s nomination represents the status quo at FHA -- that’s not good enough.”
Corker’s announcement came a week after he criticized Galante at a hearing of the Banking Committee while she sat in the audience.
“Did we dodge a bullet in appointing her full-time with all the issues that we have at FHA?,” Corker asked Shaun Donovan, the U.S. Secretary of Housing and Urban Development, the agency over FHA.
“I have enormous confidence that Carol can and will lead us to that on that path that we need to take,” Donovan replied.