HUD Focusing on FHA Reform

Nicolas Retsinas, HUD assistant secretary for housing and Federal Housing Administration commissioner, is planning during the next three months to look over the agencies and programs involved in the housing finance system to target improvements to make it work better. But fundamental change may not be possible right away. "Absent a consensus within this very complex industry, we will have incremental change and it will be at the margins," he acknowledged during a speech Wednesday before Women in Housing and Finance.

Retsinas, who is leading the administration's effort to reform the FHA, said a primary problem in his efforts to boost home ownership is the delivery system -- people and places that continue to get left behind. "At some point we need to look at statutory relief, rather than regulatory relief, and see what happens when we make the market an ally rather than enemy," he said.

In taking on his new responsibilities announced last week as Office of Thrift Supervision interim director, Retsinas pointed out his philosophy holds true in financial services reform as well: Industry consensus is necessary to make changes beyond the margins. The OTS supervises about 1,500 thrift institutions whose primary business to date has been in housing finance, making this additional directorship a natural fit for the FHA commissioner.

Asked how he will handle two jobs, he said, "I will spend whatever time is necessary to do the job." Retsinas was appointed to the OTS under the Vacancy Act rules, which gives the administration 120 days after Congress returns to nominate a permanent director, who must then be confirmed by the Senate.

Sources say several candidates from outside the agency are being considered. Brian Smith at America's Community Bankers said of Retsinas: "He may be there on a caretaker basis, but he is going to be fully engaged. But I think his first love is back to HUD and FHA reform."

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