Loan Modification

Outgoing FHA Commissioner to head MBA

By Peter G. Miller

While millions of people struggle to find jobs, and while Congress works feverishly to reduce the safety net which barely supports them, outgoing FHA Commissioner David H. Stevens has had the good fortune to instantly find work.

It was on March 11th that statements made available from both HUD and Mr. Stevens explained that he would leave his position as FHA Commissioner. On March 15th, the Mortgage Bankers Association announced that John A. Courson, the association?s President and CEO, will be leaving the association, effective June 1, 2011.

“Courson,” said the Association, “will be replaced by David H. Stevens, Assistant Secretary for Housing and Commissioner of the Federal Housing Administration at the U.S. Department of Housing and Urban Development in May. Stevens had announced earlier that he would be resigning from his position at HUD. He will leave HUD on March 31, 2011.”

Reuters announced the change with a headline that read: “Obama housing aide to be mortgage banking lobbyist.”

Or, as New York magazine explained, “The Former Heads of the FCC and FHA Will Soon Be Lobbying for the Industries They Regulated”

Well, not quite. Let’s see why:

Mr. Stevens cannot possibly become a mortgage banking lobbyist — for at least for two years.

The Pledge

That’s what the Obama campaign promised when the President ran for office: “No political appointees in an Obama-Biden administration will be permitted to work on regulations or contracts directly and substantially related to their prior employer for two years. And no political appointee will be able to lobby the executive branch after leaving government service during the remainder of the administration.”

Every political appointee under the Obama Administration accepts the Ethics Commitments By Executive Branch Personnel and agrees not to lobby for two years. As the White House explains, each political appointee agrees that “I will not for a period of 2 years from the date of my appointment participate in any particular matter involving specific parties that is directly and substantially related to my former employer or former clients, including regulations and contracts.”

Political appointees also agree that “upon leaving Government service, not to lobby any covered executive branch official or non-career Senior Executive Service appointee for the remainder of the Administration.”

So Mr. Stevens will not be lobbying his old colleagues at HUD for at least two years regarding FHA mortgages, FHA loan guidelines, FHA mortgage rates and other related matters.

The lobbying rule is no doubt a good idea. We want qualified people such as Mr. Stevens to serve in government and we want to assure that one cost of such service is not unemployment when leaving their posts. Alternatively, there ought to be — and there is — some balance in the system so that we can prevent the production of instant lobbyists who have the advantage of inside knowledge and connections from their federal service.

Full post as published by FHA Mortgage Guide on March 21, 2011 (boomark / email).