HUD Secretary Julian Castro's February 11 Financial Services Committee debut was painful. Questions of issue command raised by the Secretary's Daily Show appearance were clearly answered within 20 minutes of the committee being called to order.
Committee Republicans made their points quickly and effectively: FHA is far below its statutory capital requirement, in violation of the law as they see it, and in no financial condition to reduce mortgage insurance premiums. The only Democrat to offer an effective rebuttal was Rep. Capuano, but it wasn’t enough. The Secretary failed to defend FHA or even come armed with basic facts about the performance and condition of FHA’s book of business.
You knew it was a bad day when NAR released a statement at the hearing's conclusion offering a robust defense of the FHA premium cut. MBA's David Stevens followed suit, sharing his thoughts in The Hill.
Two weeks later, Secretary Castro found himself back on Capitol Hill in front of a different congressional committee. That committee found a different Secretary Castro.
The Secretary Castro who testified before the House THUD Appropriations Subcommittee on February 25 was knowledgeable, in command of facts and program details, and generally acquitted himself well. While members did not question him as aggressively as FSC Republicans, this time the Secretary responded when pressed.
It is hard to see a Cabinet level official fall so flat at the beginning of their tenure and HUD, in particular, needs steady-handed leadership.
I think it fair to say that members of both parties lost some measure of respect for the Secretary and he must acquit himself well in his next Financial Services appearance. Based on this most recent performance I think the Secretary is well on his way to recovery.
One final observation. It was good to hear members asking questions of the Secretary on housing policy that had nothing to do with housing finance. There was substantive discussion on targeting housing vouchers; Moving to Work; Jobs-Plus; and the HOPWA funding allocation formula, just to name a few.
You don’t see those debates in Financial Services.