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This Week in Washington

Lawmakers question Trump’s potential conflict of interest

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This Week in Washington
Monday, June 26, 2017

Reps. Maxine Waters (D-Calif.) and Al Green (D-Texas) have sent a letter to Helen M. Albert, acting inspector general of the U.S. Department of Housing and Urban Development (HUD), regarding concerns about President Donald Trump’s potential conflicts of interest.

Specifically, the lawmakers were concerned with Starrett City, a federally-subsidized, multifamily, affordable housing development in Brooklyn.

“[A] recent Washington Post article indicated that President Trump has a 4 percent ownership stake in a multifamily affordable housing development that received $491.7 million in federal subsidies to house more than 3,500 low-income households through HUD’s Project-Based Rental Assistance (PBRA) program since May 2013, nearly $38 million of which has been disbursed since President Trump took office in January,” the lawmakers wrote.

The article also revealed that Trump received at least $5 million from his ownership stake in the development between January 2016 and April 15, 2017.

“We understand that President Trump’s holding in the company that owns this complex has been placed in a revocable trust, and that he has not divested himself of the assets. This means that President Trump still has a clear interest in the funding level for the PBRA program, any policy changes to the program that could affect the company’s management of the development or its profitability, as well as the results of any future HUD investigations into his properties while the Secretary of HUD serves at his pleasure, and can be dismissed at any point without cause.”

Waters and Green presented a list of questions for Albert:

  • Has HUD sought or received guidance from the Office of Government Ethics regarding how to monitor and regulate HUD-assisted properties owned by President Trump or his family? If so, what did the guidance entail?
  • Has the Inspector General received any complaints from HUD employees regarding concerns with raising conflicts of interest issues concerning properties held by President Trump or his family?
  • Has the Inspector General experienced an increase in the number of complaints regarding conflict of interest issues from the period of January 1, 2017 to May 31, 2017 compared to the period of January 1, 2016 to May 31, 2016? Please provide the number of such complaints received during each of these periods and a description of the nature of these complaints.
  • Has the Inspector General experienced an increase in the number of whistleblower allegations of ethics violations with regard to the administration of HUD programs from the period of January 1, 2017 to May 31, 2017 compared to the period of January 1, 2016 to May 31, 2016? Please provide the number of such allegations received during each of these periods and a description of the nature of such allegations.

Waters and Greens also requested that Albert review, audit or evaluate the steps HUD has taken to address potential conflicts of interest stemming from Trump or his family’s real estate holdings. In particular, they asked that Albert specify whether relevant HUD staff are aware of all HUD-assisted properties in which Trump or his family have an ownership stake.

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12 USC Section 2605 or Section 6 is titled Servicing of mortgage loans and administration of escrow accounts. It pertains to qualified written requests, notices of transfer of servicing and the administration of escrow accounts.
An arrangement that involves a person who is in a position to refer business as part of a real estate settlement service and who has an interest in a settlement services provider.

In the arrangement, the person, who has either an affiliate relationship with or a direct or beneficial ownership interest of more than one percent in a settlement services provider, directly or indirectly refers business to that provider or influences a consumer to select that provider.
An arrangement that involves a person who is in a position to refer business as part of a real estate settlement service and who has an interest in a settlement services provider.

In the arrangement, the person, who has either an affiliate relationship with or a direct or beneficial ownership interest of more than one percent in a settlement services provider, directly or indirectly refers business to that provider or influences a consumer to select that provider.
A mortgage disclosure that lists all estimated charges and fees associated with your loan. In addition to fees and charges, it will list your loan amount, mortgage rate, loan term and estimated monthly payment. Your escrows due at closing for insurance and taxes will also be outlined. Mortgage lenders are legally required to provide a GFE within three days of receiving your application.
A mortgage disclosure that lists all estimated charges and fees associated with your loan. In addition to fees and charges, it will list your loan amount, mortgage rate, loan term and estimated monthly payment. Your escrows due at closing for insurance and taxes will also be outlined. Mortgage lenders are legally required to provide a GFE within three days of receiving your application.
Under RESPA Section 2605(e)(1)(B), a qualified written request is a written correspondence that includes: 1) the name and account of the borrower, or has enough information to allow the servicer identify that information; and 2) a statement of the reasons for the belief of the borrower that the account is in error or provides sufficient detail to the servicer regarding other information sought by the borrower.

A QWR cannot be written on a payment coupon or other payment medium supplied by the servicer.
Under RESPA Section 2605(e)(1)(B), a qualified written request is a written correspondence that includes: 1) the name and account of the borrower, or has enough information to allow the servicer identify that information; and 2) a statement of the reasons for the belief of the borrower that the account is in error or provides sufficient detail to the servicer regarding other information sought by the borrower.

A QWR cannot be written on a payment coupon or other payment medium supplied by the servicer.
12 USC Section 2609 or Section 10 is titled Limitation on requirement of advance deposits in escrow accounts. It governs escrow accounts including notifications and statements to borrowers. Section 10 also sets out penalties for those who violate the section.
RESPA Section 3 provides that a thing of value includes any payment, advance, funds, loan, service or other consideration

Regulation X says thing of value includes: monies, things, discounts, salaries, commissions, fees, duplicate payments of a charge, stock, dividends, distributions of partnership profits, franchise royalties, credits representing monies that may be paid at a future date, the opportunity to participate in a money-making program, retained or increased earnings, increased equity in a parent or subsidiary entity, special bank deposits or accounts, special or unusual banking terms, services of all types at special or free rates, sales or rentals at special prices or rates, lease or rental payments based in whole or in part on the amount of business referred, trips and payment of another person’s expenses or reduction in credit against an existing obligation.
A form used by a settlement or closing agent itemizing all charges imposed on a borrower and seller in a real estate transaction. This form represents the closing transaction and provides each party with a complete list of incoming and outgoing funds. RESPA requires the HUD-1 to be used as the standard real estate settlement form in all transactions in the U.S. involving federally related mortgage loans.
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