HUD Secretary Ben Carson appears to confuse REOs – foreclosed properties – with Oreo cookies in a contentious congressional hearing
Secretary of Housing and Urban Development Secretary Ben Carson confused foreclosure properties for chocolate cookies during congressional testimony this week.
The gaffe came when Rep. Katie Porter (D-Calif.) asked Carson about properties that fail to sell at foreclosure auctions, otherwise known as real estate-owned properties (REOs), according to a CNN report. Porter asked Carson to explain why HUD’s Federal Housing Authority owned more REOs than Fannie Mae or Freddie Mac.
“I’d also like to get back to me if you don’t mind to explain the disparity in REO rates,” Porter said. “Do you know what an REO is?”
“An Oreo?” Carson said.
“No, not an Oreo,” Porter said. “An R-E-O. REO.”
Carson did not appear to know what an REO was, according to CNN. He answered, “Real estate…” before pausing. Porter asked Carson what the “O” stood for, to which he replied, “Organization.”
“Owned, real estate-owned,” Porter said. “That’s what happens when a property goes to foreclosure. We call it an REO.”
According to a 2018 report, 31.9% of the FHA’s asset sales that year were REOs. Porter asked Carson why the FHA – an agency with a mandate to encourage housing – had more REOs than either of the GSEs, CNN reported.
“FHA loans have much higher REOs – that is, they go to foreclosure rather than to loss mitigation or to non-foreclosure alternatives like short sales – than comparable loans at the GSEs,” she said. “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 the GSEs.”
Following the hearing, Carson tweeted a photo of himself holding a package of Oreo cookies.
“OH, REO!” Carson tweeted. “Thanks, @RepKatiePorter. Enjoying a few post-hearing snacks. Sending some your way!”
Porter, however, didn’t seem to find the gaffe amusing.
“I was asking serious questions about serious problems that Americans are facing,” she told CNN. “The foreclosure rate continues to exist at FHA and the foreclosure proceedings and processes have been bad for over 15 years I worked in the issue. I was coming with a series of serious questions, and I was hoping to get serious answers.”
