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Housing Secretary Can’t Tell the Difference Between a Basic Real Estate Term and a Cookie

In real estate parlance, an “REO” (abbreviation meaning “real estate owned”) is a term used in reference to properties where ownership has transferred back to a bank or lender after they have been foreclosed upon and failed to sell at auction. Granted, I only know this because Rep. Katie Porter (D-CA) succinctly explained what the term meant to Housing and Urban Development Secretary Ben Carson today during a meeting of the House Financial Services Committee.

Carson didn’t have much in the way of answers as to Porter’s questions about why so many mortgages granted through the government organization he heads have since resulted in foreclosure. Part of the reason Carson didn’t have the answers Porter was looking for was because he didn’t know what an REO was, which is apparently one of the first things an aspiring real estate professional would learn. Given that Carson, a retired neurosurgeon, is in charge of the federal housing program, you’d think he would have picked up the term during the two years on the job instead of having it explained to him for the very first time by a congresswoman at a hearing.

The exchange was extremely uncomfortable, beginning with Porter asking Carson to identify what each letter in REO means with Carson mostly failing at the task, while seeming inappropriately relaxed and unbothered by his glaring incompetence.

“Do you know what an REO is?” Porter asked.

“An Oreo?” Carson responded, sounding mildly sedated.

The exchange went down hill from there when Carson responded “e-organization” when Porter asked him what the O stands for.

“Owned. ‘Real estate owned.’ That’s what happens when a property goes into foreclosure,” an exasperated Porter said. “We call it an REO.”

After the hearing, Carson let Porter know just how seriously he takes his commitment to public service and finding out why people who use mortgages backed by his own department have a higher rate of foreclosure than people who used lenders like Fannie Mae and Freddie Mac.

 

Tags: Ben Carson