FHA, Rural Housing Service comment on job cuts

Andrew Martinez/National Mortgage News

Government mortgage officials say they're tidying up operations following the Trump administration's sizable layoffs at their departments. 

The Federal Housing Administration's single-family workforce was cut by 36%, while the U.S. Department of Agriculture's Rural Housing Service lost at least 30% of its staff, representatives revealed Monday at the Mortgage Bankers Association's Secondary & Capital Markets Conference. 

"We are looking to realign and focus on consolidating," said Julie Shaffer, associate deputy assistant secretary for single-family housing at the FHA, who has been with the organization for over 36 years according to LinkedIn.

Along with the layoffs, Shaffer said the FHA took down hundreds of mortgagee letters that were superseded and confusing both customers and artificial intelligence platforms gathering information.

The cuts at RHS didn't significantly affect their operations, said Ingrid Ripley, executive director of the RHS single-family housing guaranteed loan program, and former chief of staff of Rural Development at the USDA.

"This is a great opportunity to deregulate, and we're looking at our policies to see what changes we can continue to make," said Ripley.

Neither representative said whether the cuts came from the Trump Administration's cost-cutting task force. The Department of Government Efficiency also claims to have made cuts to the Department of Veterans Affairs' Loan Guaranty Program; although advertised, a representative for the VA's lending program was not in attendance. 

Ripley and Shaffer provided some insight into the administration's initial disruption to their programs, specifically changes to the departments' websites. Administration staffers took down many webpages and then added some back, such as a "pay off your FHA loan" button, Shaffer said. 

"I said no, we don't hold their loan," the FHA leader said. "We had a laundry list of stuff to put back up. They never took down our FAQs for FHA."

What FHA and RHS are planning

Ripley referenced a slow progress of technology upgrades at the government, but hinted at progress. The RHS' long-awaited delegated authority is on the horizon, with a final rule expected in the fourth quarter, she said. With that wait, the RHS has reassigned underwriters to aid the service in different areas. 

The FHA is working on an artificial intelligence chatbot for its customers, and mulling modernizing appraisal reviews. The administration will also continue to use its "Drafting Table" which hasn't yet been updated under new Department of Housing and Urban Development Secretary Scott Turner. Shaffer acknowledged the FHA didn't use the drafting table for its recent update to loss mitigation. 

The FHA leader also responded to an audience question regarding a rumor that just 30% of partial claim recipients were successful. Shaffer said she couldn't immediately cite any data, but added that the FHA was aware of borrowers receiving multiple partial claims, and was putting guardrails back in place. 

"At the end of the [first] Trump administration we had 400,000 partial claims," said Shaffer. "Today we have 1.8 million. We realize we have to get back to some normalcy since COVID."