Watchdog Asks for Probe in Mortgage Lending ‘Revolving Door’ Case

On Monday, a watchdog group will ask for an investigation of David H. Stevens, a former Federal Housing Administration (FHA) official, who currently serves as President and CEO of the Mortgage Bankers Association (MBA).

The National Legal and Policy Center (NLPC) will ask in dual requests to the U.S. Attorney for District of Columbia, and the Inspector General of the Department of Housing and Urban Development, that Stevens be investigated for possibly violating the statutory one-year ban on having contact with his former agency, as well as the lifetime ban on having contact with officials on matters on which he worked while in government. Click here to download a copy of the requests.

At issue is Stevens’ apparent quarterbacking of a campaign by the big banks to win mortgage lending business from Fannie Mae and Freddie Mac in the wake of the financial crisis, and the placement of the two Government Sponsored Enterprises (GSEs) in conservatorship.

Stevens’ actions first came under scrutiny on December 7, 2015 by the New York Times in a front-page article describing how “a behind-the-scenes effort of Wall Street banks to take over the mortgage market is driven by advocates switch between roles in Washington and the private sector.” The NLPC requests allege that there appear to be “over 25 instances in which Mr. Stevens may have violated the law.”

According to NLPC Chairman Ken Boehm, “This is the most egregious instance of revolving door abuse that I have seen in some years. Even by Washington’s current low standards, Stevens was particularly brazen in apparently ignoring the pertinent statutes and ethics regulations.”

NLPC previously exposed one of the most famous revolving door cases on record. Darleen Druyun, who left her Defense Department procurement position to assume a job with Boeing, was prosecuted in 2005 and sent to prison, along with former Boeing CFO Mike Sears.

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