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Blog: Senate confirms new FHA chief

The mortgage and banking lobby scored a victory last week. And no, in this case, we are not talking about the Dodd-Frank Act relief bill signed by President Donald Trump last week.

brianmontgomeryThe industry finally got its man at the Federal Housing Administration (FHA). On May 23, the U.S. Senate confirmed Brian Montgomery as FHA commissioner and assistant secretary of housing at the U.S. Department of Housing and Urban Development (HUD).

Trump originally nominated Montgomery last September, and the nomination was moved forward by the Senate Banking, Housing and Urban Affairs Committee six months ago. That's when the nomination fell into a tar pit.

Some Democrats thought Montgomery was too close to the industry, and the status of the nomination remained in limbo for six months, causing angst for the industry. The nomination was opposed by some influential Democrats, including Sen. Elizabeth Warren, D-Massachusetts, and Sen. Sherrod Brown, D-Ohio, who is the ranking member of the banking committee.  

Montgomery is a known figure, and all the major banking and housing trade associations strongly supported his confirmation. Basically, he is getting his old job back with the government. Montgomery served his first term as FHA commission from 2005 to 2009 during the last half of the George W. Bush Administration and for six months into the first term of President Barack Obama.

In his September testimony, Montgomery highlighted the FHA’s greatly expanded role during the recession, when credit otherwise largely dried up.

“FHA played no role in the housing boom or collapse, but it was FHA that stepped in and provided more than $1 trillion in mortgage liquidity that helped more than eight million families purchase or retain their homes between 2008 and 2012,” Montgomery testified. “I’m extremely proud of the effort of the FHA staff who also further proved the critical role FHA plays during housing downturns.”

As has been advocated by the Urban Institute and other think tanks, Montgomery indicated during his September testimony that the agency could make changes that would clarify the lenders’ responsibilities when making an FHA-insured loan, so all parties involved better understand the rules of the road.

“We must do a better job of providing regulatory clarity to mortgage lenders,” Montgomery said. “It’s time we treat them more like business partners than adversaries.” 


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