finance & tax Ben Carson confuses a real-estate term and a cookie

Housing and Urban Development Secretary Ben Carson tussled awkwardly with freshman Rep. Katie Porter (D-Calif.) at a hearing on Tuesday over HUD real estate owned — or REO — homes, at one point asking if she was referring to an “Oreo.”

REO homes are acquired by HUD after a foreclosure on a Federal Housing Agency-insured mortgage, and Porter said foreclosure rates for such properties were higher than for homes not backed by the FHA.


She asked Carson to “explain the disparity in REO rates — do you know what an REO is?”

“An Oreo?” Carson responded.

“No, not an Oreo. An R-E-O. R-E-O,” Porter said, prompting Carson to offer, “real estate?”

“Real estate owned – that’s what happens when a property goes into foreclosure, we call it an REO, and FHA loans have much higher REOs, that is, they go into foreclosure rather than into loss mitigation or to non-foreclosure alternatives like short sales, than comparable loans” at Fannie Mae and Freddie Mac, said Porter, who later tweeted out the exchange.

"So I’d like to know why we’re having more foreclosures that end in people losing their homes, with stains to their credit and disruption to their communities and their neighborhoods at FHA than we are at” Fannie and Freddie, the two companies that dominate the mortgage financing market, she said.

Carson later poked fun at the exchange, tweeting a picture of himself holding Oreos with a note to Porter that he would be “sending some your way!”

His appearance before the House Financial Services Committee — his first since Democrats took control of the chamber — was contentious throughout the morning, with Chairwoman Maxine Waters opening the hearing by accusing HUD of "actively causing harm" with its policies.

OH, REO! Thanks, @RepKatiePorter. Enjoying a few post-hearing snacks. Sending some your way! pic.twitter.com/q4MMTBWVUI — Ben Carson (@SecretaryCarson) May 21, 2019

Porter — who often uses committee hearings to try to make Trump administration witnesses appear foolish, occasionally using props like textbooks and whiteboards — had earlier asked Carson whether he supports adjusting the interest curtailment penalty schedule for FHA loans that are in default.

“In some cases, I might be in favor of it, in some cases I might not,” Carson replied.

“OK, do you know what the interest rate curtailment schedule is at FHA and how it’s different from the GSEs?” Porter said.

“Explain,” Carson said, leading Porter to sigh.

Carson said he had not had “any discussions about that particular issue, but I will look it up.”

“You’re getting way down in the weeds here,” Carson said later, adding, “I’m very happy to put you in contact with the people who deal with that. If I got down in the weeds on every issue, I wouldn’t get very far.”