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HUD Secretary Ben Carson Looks to Roll Back on Mortgage Penalties

The Department of Housing and Urban Development Secretary Ben Carson is looking to roll back on penalties dished out to big banks for faults in mortgage lending.

"Carson, head of the Department of Housing and Urban Development, said Monday that the agency wants lenders to get more comfortable about financing lower-income borrowers without risk of being sued by the federal government," according to National Mortgage News.

The report reveals that penalties for errors in FHA loans have been so hefty over the years that big banks scaled back on mortgage lending. The result was negative for lower-income borrowers, who were stuck with higher costs and a smaller selection of financing options.

"The HUD secretary's comments come as President Donald Trump and his administration attempt to curb rules and regulations they see as constraining businesses," according to NMN.

"The U.S. Treasury Department is releasing a series of reports with recommended regulatory changes, many of which would require new laws."

With fewer penalties moving forward, big banks will likely increase their profits through and increase in loans. Overall this change would be a shift and victory for big banks.

"Carson's effort isn't a new one. The FHA under President Barack Obama tried to make changes at HUD more than a year ago, but lenders said they didn't go far enough," according to the report.

"Obama also met resistance from attorneys with the Justice Department, who said they were already using discretion in limiting cases to lenders whose problems were significant."

The changes have yet to be made but the HUD looks to be moving quite fast. The Trump administration has also been quite speedily making changes to rules and regulations that restrict businesses. To find out more about Secretary Carson's push, click on the image above.

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