President Trump's Housing Agenda?

President-elect Trump's housing agenda is likely to involve changes to the new rules and policies on mortgages imposed following the 2008 financial crisis, details that emerged during Dr. Ben Carson's confirmation hearing to lead the Department of Housing and Urban Development.

Trump's views on housing remained mostly a mystery throughout the campaign. Only once did he refer to any of the concerns facing home buyers, renters, builders, real estate agents and lenders. In an appearance at a homebuilders' trade group meeting in August, the Republican said that new Obama administration rules made it "impossible for your people to go get mortgages."

In his appearance before the Senate Banking Committee, Carson lent a little more context to that industry-friendly but vague statement.

In his prepared testimony, Carson wrote that banks are "loath" to lend to homebuyers through programs that involve insurance through the Federal Housing Administration, part of HUD, because of the "fear of getting sued if the borrowers default."

Carson expressed the view that lenders have pleaded to the federal government over the past half-decade-plus because the regulatory and legal actions taken in response to the crisis have left banks and other lenders scared to extend credit for fear of being penalized or sued by the government later.

"His comments there were helpful," said David Stevens, head of the Mortgage Bankers Association.

Most significant are the major settlements that the government has reached with big banks over bubble-era mortgages that were sold to the FHA, along with other agencies. For example, in April the Department of Justice announced a $1.2 billion settlement with Wells Fargo for claiming that home loans met the terms for FHA insurance, when they did not.

While populist critics have said that the Obama Justice Department should have gone further in prosecuting big banks for potential mortgage fraud, the industry has its own complaints about the way that the lawsuits have been handled. Because the suits turn on specific terms in long loan contracts, they say, it is difficult to be certain that they won't be on the hook for inevitable defaults in the future.