| President-elect Barack Obama has named a former commercial mortgage executive as his choice to head the U.S. Department of Housing and Urban Development. It’s the second time around at HUD for the nominee.
In a weekly radio address Saturday, Obama announced his nomination of Shaun Donovan as HUD secretary, according to a transcript of his prepared statement. Donovan currently serves as commissioner of New York City’s Department of Housing Preservation and Development. A biography from the agency — which claims its $7.5 Billion New Housing Marketplace Plan to build and preserve 165,000 affordable-housing units is the largest housing plan in the nation — indicates he was appointed by the city’s mayor, Michael R. Bloomberg, in March 2004. The nominee previously worked at Prudential Mortgage Capital Co. as managing director of its FHA lending and affordable housing investments, according to the biography. That operation manages a $1.5 billion portfolio.
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NYC HPD photo of Shaun Donovan
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Donovan also was a visiting scholar at New York University and a consultant to the Millennial Housing Commission on strategies for increasing the production of multifamily housing.
He replaces Steven C. Preston as HUD secretary. Preston was confirmed in June by the U.S. Senate following the resignation of Alphonso Jackson amid allegations he held up around $50 million in federal funding to the Philadelphia Housing Authority because the organization refused to approve a proposal presented by a developer with ties to Jackson.
Donovan served as Deputy Assistant Secretary for Multifamily Housing at HUD until March 2001 in President Clinton’s administration. During his previous HUD tenure, he oversaw $9 billion in housing subsidy programs and a portfolio of 30,000 multifamily properties with over 2 million housing units.
He also served as acting FHA Commissioner during a prior presidential transition.
The Mortgage Bankers Association quickly praised Obama’s choice.
“We look forward to working with him to solve the ongoing crisis in the U.S. housing market,” John A. Courson, chief operating officer of the trade group, said in a statement Saturday.
Lenders One Mortgage Cooperative, a national alliance of mortgage bankers that originate $40 billion annually, called for swift confirmation of the nominee by the U.S. Senate.
Obama noted that Donovan will usher in a city-based approach to housing to replace the Washington, D.C.-based approach.
“He understands that we need to move past the stale arguments that say low-income Americans shouldn’t even try to own a home or that our mortgage crisis is due solely to a few greedy lenders,” Obama stated. “He knows that we can put the dream of owning a home within reach for more families, so long as we’re making loans in the right way, and so long as those who buy a home are prepared for the responsibilities of homeownership.”
While Obama laid much of the blame for the mortgage meltdown squarely on deceitful mortgage lenders, ill-informed investment bankers and lax regulators, he also acknowledged that some reckless borrowers took out mortgages they couldn’t afford.
The president elect promised to stem rising foreclosures through a “bold plan” developed by his economic team with HUD at the heart of the strategy.
“Credit is tight and people can’t get loans,” Obama said. “We must end the mortgage crisis where it began.”
The Bush administration will hand over the reins to the Obama administration on Jan. 20.
