April 18, 2018

Press Obsesses Over EPA Pittances, Ignores Huge 2016 Problems at HUD

After nearly a decade of indifference, the press has again began to question federal expenditures, focusing on trivial items to score political points. There’s nothing wrong with watching pennies, but the uptick in such efforts contrasts sharply with the failure to notice monumentally larger stacks of pennies wasted during the Obama administration. The most recent example, covered by the Daily Caller and virtually no one else: nearly $2 billion in HUD-FHA loans disbursed in 2016 to borrowers who should not have been allowed to receive them.

EPA head Scott Pruitt has been a primary target of the current obsession with minor amounts of spending.

Pruitt’s travel and security expenditures may occasionally be questionable, but no more than those incurred by Obama EPA head Gina McCarthy. The press ignored those. Jazz Shaw at Hot Air detailed much of it in March:

In 2016, Team McCarthy made three trips spending the following amounts:

$68,382 to travel to Ghana
$45,139 to travel to Peru
$74,737 to travel to Tokyo

They were a bit more busy in 2015 it seems. McCarthy and the security team racked up the following bills:

$41,320 to travel to Paris
$90,367 to travel to Dubai
$67,702 to travel to Tokyo
$56,192 to travel to Italy

Shaw bolded and italicized the final item to compare it with a Washington Post item which went after Pruitt on March 20 over an Italy trip where security costs were $30,553.98.

As to the HUD-FHA fiasco, the press has ignored a report which got the Daily Caller’s Ethan Barton covered on Monday:

DailyCallerOnIllegalHUDloans041618

The IG probably should have audited a larger sample before reaching numerical conclusions about the entire loan population, but the rate and amount of loans disbursed to non-qualified borrowers is disgracefully high. The IG also reported a chronic rate of failure to perform due diligence, and criticized the shabby and incomplete condition of some of the underlying databases. In light of all of this, it’s reasonable to allege that the Obama-era FHA deliberately disbursed illegal loans.

If the delinquency rate resulting from this laxness is a very conservative two percentage points higher than it would have been if HUD and FHA had properly screened its loan applicants, that’s a taxpayer loss which could have been avoided of nearly $40 million. The final loss amount will probably be much higher. An February article at a mortgage industry website reported the following:

… Compared to the third quarter of 2017, the 90+ day delinquency rate on FHA loans rose (during the fourth quarter) by 75 basis points.

… The FHA overall delinquency rate in the fourth quarter of 2017 is higher compared to the fourth quarter of 2016 in all but three states.

It’s easy to see why the these deteriorations in loan performance occurred.

Press watchdogs should focus on large-dollar problems such as these, regardless of the presidential administration involved. But in the Trump era, they have been more interested in playing childish “gotcha” games over inconsequential matters.

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