Ben Carson used a speech at the Mortgage Bankers Association’s annual conference in Denver to express interest in cutting government regulations on Federal Housing Administration-backed lending.
The Housing and Urban Development secretary told the MBA that his department plans to make life easier for FHA lenders in order to expand loan availability to lower-income borrowers, according to a Bloomberg report.
“Innocent errors should not create chaos and fear and make people less likely to get involved in the first place,” Carson said in his remarks, Bloomberg reported.
The Department of Justice and the FHA are actively seeking ways to amend the current regulatory landscape to avoid punishing companies for simple oversights, as opposed to outright fraudulent activities, Carson reportedly told the MBA audience.
The DOJ oversees claims of fraud under the False Claims Act, which has resulted in some serious penalties against reverse mortgage and other lenders: Back in 2015, the DOJ reached a $29.6 million settlement with Walter Investment Management Corp. (NYSE: WAC) over false interest claims regarding its Reverse Mortgage Solutions, Inc. subsidiary.
Wells Fargo (NYSE: WFC) paid out $1.2 billion in settlement cash regarding separate residential FHA mortgage issues the following year, with the DOJ accusing the lending giant of multiple fraudulent activities.
Carson’s words come amid a general anti-regulatory push from the Trump administration, which has made slashing federal oversight of the financial industry a key part of its economic policy. The National Reverse Mortgage Lenders Association has sought multiple types of relief in response to a call from HUD for suggestions from the industry; the department was in turn inspired by executive orders from President Trump that intend to roll back regulations.
The HUD secretary also expressed interest in a variety of Home Equity Conversion Mortgage-related reforms during a Senate hearing earlier in the month, including removing reverse mortgages from the Mutual Mortgage Fund and extending HECM access to co-op owners.
Written by Alex Spanko