How Bush's HUD responded to the mortgage crisis

As the housing crisis erupted, Bush's HUD secretary made matters worse.


Steve Benen
April 14, 2008 5:59PM (UTC)

I've marveled for years at the apparent corruption and incompetence in Bush's Department of Housing and Urban Development, but the Washington Post ran a disconcerting front-page item yesterday explaining that mismanagement and criminal investigations arguably weren't the most offensive part of Bush's HUD.

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In late 2006, as economists warned of an imminent housing market collapse, housing Secretary Alphonso Jackson repeatedly insisted that the mounting wave of mortgage failures was a short-term "correction."

He pushed for legislation that would make it easier for federally backed lenders to make mortgage loans to risky borrowers who put less money down. He issued a rule that was criticized by law enforcement authorities because it could increase the difficulty of detecting and proving mortgage fraud. [...]

[Critics] contend that Jackson ignored warnings from within his agency, the Department of Housing and Urban Development, whose inspector general told Congress that some of the secretary's efforts were "ill-advised policy" and likely to put more families at risk of losing their homes.

Hmm, why does this sound so familiar? Bush puts an unqualified buddy in charge of a major federal agency, the Bush buddy ignores the concerns of qualified aides and experts, the buddy then sees a crisis emerge and chooses to intentionally not act, and when pressed for an explanation, the White House says Bush's buddy is doing a heckuva job.

It seems to be a running theme with these guys.

And here's the kicker -- while foreclosures rose and default rates hit the roof, Bush's HUD secretary treated himself with "an emergency bid to obtain oil portraits of Jackson and four other HUD secretaries at a cost to taxpayers of $100,000."

If the housing crisis weren't so serious, this kind of ridiculousness might even be funny.


Steve Benen

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