Former HUD Secretary Cisneros: Profiteers, Not Government, To Blame for Housing Crisis

Wall Street Journal
Jun. 04, 2010

AUSTIN, Texas — Former HUD Secretary Henry Cisneros placed the blame for the recent housing crisis on “unscrupulous interests” that fueled reckless lending and weak regulation rather than housing policies of the past two decades.

Mr. Cisneros, now a 62-year-old developer based in San Antonio, served as secretary of the Department of Housing and Urban Development from 1993 to 1997 during the Clinton Administration. He was known as a champion of boosting homeownership levels, particularly among minorities. During his term, HUD loosened some lending requirements for lenders providing HUD-backed loans. Still, in a speech to the National Association of Real Estate Editors in Austin on Thursday, Mr. Cisneros blamed the housing crisis on a mix of interests looking to profit from the housing boom of last decade. Among them: Wall Street firms that created exotic instruments like collateralized debt obligations that eventually failed, rating agencies that graded those instruments too leniently and overzealous mortgage lenders such as Ameriquest Mortgage Co.

“The real problem occurred not out of a governmental push, but out of a hijacking of the homeownership process by some unscrupulous interests,” Mr. Cisneros said to an audience of roughly 50 at the Hilton Austin hotel.

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