Housing and Urban Development Secretary Ben Carson on Tuesday appeared to think that a freshman Democrat was questioning him about Oreo cookies during his congressional testimony, when she was in fact asking him about foreclosure properties.
Rep. Katie Porter, a California Democrat, asked Carson about real estate owned properties — or REOs, properties that fail to sell at foreclosure auctions — during his testimony before the House Financial Services Committee.
“I’d also like you to get back to me if you don’t mind to explain the disparity in REO rates,” Porter said to Carson. “Do you know what an REO is?”
Carson replied, “An Oreo?”
“No, not an Oreo,” Porter said. “An R-E-O. REO.”
Carson responded, “Real estate …” before pausing.
Porter asked, “what’s the O stand for?,” to which Carson answered, “organization.”
Porter replied, “Owned, real estate owned. That’s what happens when a property goes to foreclosure, we call it an R-E-O.”
Porter alleged that HUD’s Federal Housing Authority had more REOs than did government-sponsored enterprises, or GSEs. According to HUD’s 2018 report, foreclosures represented 31.90% of the agency’s asset sales.
“FHA loans have much higher REOs — that is they go to foreclosure rather than to loss mitigation or to non-foreclosure alternatives like shortsales — than comparable loans at the GSEs,” Porter 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.”
After the hearing, Carson tweeted a photo of himself holding a package of Oreos and a photo with the package and a note that read: “To Rep. Porter, Thanks for your part in today’s hearing. Hope you like these O’REO(s).”
“OH, REO! Thanks, @RepKatiePorter. Enjoying a few post-hearing snacks. Sending some your way!” Carson tweeted alongside the pictures.
The hearing comes less than a week after the Government Accountability Office wrote in a letter to Congress that HUD broke the law when it spent about $40,000 in 2017 for a new dining set and dishwasher for Carson’s office.
Under law, federal employees are prohibited from spending in excess of an appropriation and an agency is restricted under law from spending more than $5,000 to furnish or redecorate an office without notifying Congress.
The exchange was also another example of Porter’s incisive questioning and economic acumen. Last month, she stumped multimillionaire JPMorgan Chase CEO Jamie Dimon with questions about a hypothetical JPMorgan Chase employee — making a fraction of what the company’s top executives are paid — who is running a $567 deficit each month because her salary is insufficient to cover basic expenses.
