Obama's Pick For HUD To Tackle Foreclosures

MICHELE NORRIS, host:

This is All Things Considered from NPR News. I'm Michele Norris.

MELISSA BLOCK, host:

And I'm Melissa Block. Today on Capitol Hill, the president-elect's nominee to head the Department of Housing and Urban Development was welcomed with open arms by senators from both parties. The nominee is Shaun Donovan, the New York City housing commissioner. And with his appointment, Barack Obama pledged to bring fresh thinking to HUD. The current economic crisis was partly caused by the collapse of home mortgages, but HUD has been largely absent from the debate. NPR's Brian Naylor reports on today's confirmation hearing.

BRIAN NAYLOR: Democrats on the Housing Committee made clear their dissatisfaction with HUD's actions during the Bush administration. The panel's chairman, Connecticut Democrat Christopher Dodd, said the agency has, in his words, been mismanaged and ridden by scandal in the last several years.

Senator CHRISTOPHER DODD (Democrat, Connecticut; Chair, U.S. Senate Committee on Banking, Housing and Urban Affairs): Fundamentally, HUD has been left adrift at a time when bold leadership and clear direction were never more important.

NAYLOR: New Jersey Democrat Robert Menendez said HUD has been relegated to junior status.

Senator ROBERT MENENDEZ (Democrat, New Jersey; Member, U.S. Senate Committee on Banking, Housing and Urban Affairs): While HUD never seems to gather the press attention as other agencies do to American families, your future role at this agency may be far more important. And I agree with those who say that HUD has been sitting at the kids' table, and it is time for that to change.

NAYLOR: Donovan, a boyish-looking 42, is something of a housing wunderkind. A Harvard-trained architect, he's worked on both sides of the housing issue. He was deputy assistant secretary for multifamily housing at HUD during the Clinton administration. He worked at Prudential Mortgage Capital Company. And since 2004, he's been New York City's housing commissioner, where he's led a multibillion dollar effort to build and preserve some 165,000 units of affordable housing. At HUD, he'll have his hands full, as he acknowledged today.

Mr. SHAUN DONOVAN (Nominee, Secretary, U.S. Department of Housing and Urban Development, Barack Obama Administration): It is estimated that approximately 2.2 million homes went into foreclosure in 2008. One in 10 American families who owns a home is in financial trouble. Housing is at the root of the market crisis we are now experiencing, and HUD must be part of the solution.

NAYLOR: The senior Republican on the housing panel, Senator Richard Shelby of Alabama, said he wants Donovan to spend some time investigating what went wrong with subprime mortgages. He said the federal government may have made things worse.

Senator RICHARD SHELBY (Republican, Alabama; Ranking Republican, U.S. Senate Committee on Banking, Housing and Urban Affairs): If we don't deconstruct what went wrong and how to fix it, we'll never fix it, will we?

NAYLOR: Donovan said there was blame to go around among lenders and homeowners, promising to make a system that was open, transparent, fair and flexible. That seemed to satisfy Shelby, who said he looks forward to supporting the nomination. Senators also asked Donovan to ensure HUD makes better use of a program, approved last summer, to help homeowners facing default to refinance with lower-cost, government-backed mortgages. So far, only a fraction of those eligible to take part in the program have applied. Donovan also pledged to address the problem of homelessness, especially among families who have lost their homes due to foreclosure.

Mr. DONOVAN: There has been a dramatic, really, movement across the country over the last decade or so that has focused energy around the problem of homelessness among individuals. And so, I think if we can focus the same kind of energy and partnership, we can make the same kind of progress on family homelessness.

NAYLOR: In the end, there was nary a dissenting voice heard from Housing Committee senators about Donovan, and Chairman Dodd said he was hoping for a committee vote on the nomination by the end of the week. Brian Naylor, NPR News, Washington. Transcript provided by NPR, Copyright NPR.