An interesting item going around the real estate blogs this week is the fact that the Obama Administration’s FHA Commissioner-Nominee, David H. Stevens, may not be the next FHA Commissioner after all and the reasons why might surprise you.
For those who didn’t know, David H. Stevens is the former President and COO of Long & Foster Realty in Chantilly, VA. Mr. Stevens ran the company’s affiliated business division. He also previously worked as the Executive VP for Wells Fargo Home Mortgage.
The Obama Administration nominated Mr. Stevens back in March to serve as the next FHA Commissioner, subject to U.S. Senate approval.
To give you the full flavor of the FHA Commissioner-Nominee, you can read some of his testimony on behalf of RESPRO this past fall. To further induce nausea, the NAR hailed Mr. Stevens’ nomination back in March.
Everything sounded good for the proponents of real estate market consolidation and one-stop shopping until the end of last month.
According to an April 2009 article in the Washington Post, Mr. Stevens’ confirmation is now being held up due to several federal lawsuits involving Long & Foster and allegations that the company violated RESPA Section 8 by requiring their agents to use Long & Foster’s affiliated partner, Prosperity Mortgage. Per the article, Long & Foster representatives prepared a damning memo chastising Long & Foster real estate agents for not using Prosperity Mortgage. The memo gives the appearance that Long & Foster made this point to encourage its agents to use the affiliated mortgage company and to thereby profit from the referral.
It remains to be seen whether Long & Foster’s affiliate relationship was or was not a sham arrangement to disguise an illegal kickback in violation of RESPA’s prohibition against kickbacks. The memo is obviously a critical component of that case.
The WP article states that in a document recently filed by Long & Foster in the pending federal lawsuit, it was learned that none other than David H. Stevens, the current FHA Commissioner-Nominee, was the author of the memo.
It should be noted that Prosperity Mortgage is an affiliate of Wells Fargo Home Mortgage, Mr. Stevens’ former employer before Long & Foster.
You can read the full WP article right here.
We’ll let you know if and when the next shoe drops.