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49 » VISIT US ONLINE @ DSNEWS.COM Stevens, as the Commissioner of FHA at the time, was a principal figure in these council meetings and discussions, e Times reported. Advocates of low-income housing and borrowers expressed concern that the policies being developed were more favorable toward the big banks, according to e Times. After two-and-a-half years of meetings and discussions, the Administration presented its options for housing finance reform in February 2011—but whatever they decided, it was clear that Fannie Mae and Freddie Mac had to go, and the policymakers decided they would work with the GSEs' conservator, the FHFA, to wind them down. "e policy to eliminate Fannie and Freddie was a page out of the mortgage bankers' playbook. And like the authors of that plan, the administration emphasized that taxpayers would be protected and that a new, level playing field would benefit all participants in the housing market. "In private, however, officials cited another group of beneficiaries under the plan: big banks. "An internal Treasury memo written on Jan. 4, 2011, to Mr. Geithner by one of his top deputies characterized the administration's first option to wind down Fannie and Freddie as 'a bank-centric model" that "benefits larger institutions' with the capacity to hold mortgages on their books." In March 2011, about a month after the Administration issued its recommendations, Stevens became President and CEO of the MBA. e New York Times also cited Jim Parrott, currently a research fellow at the Urban Institute, as another former HUD official who has worked on housing finance policy and has consulted for organizations that stand to benefit financially from the elimination of Fannie Mae and Freddie Mac. Parrott served an advisor to Donovan from July 2009 to December 2010, after which he led housing finance policy at the National Economic Council at the White House until January 2013, according to the Times. e Times investigation revealed several logs that showed that Berman, Stevens, and Parrott all worked on housing finance policy after they left their government positions. Many have questioned whether such a "revolving door" between the private and public sectors when it comes to housing finance policy is ethical, or even legal. e U.S. Office of Government Ethics states: "Two of the restrictions may affect any former 'employee,' regardless of rank or position. e restrictions bar a former employee from representing another person or entity by making a communication to or appearance before a Federal department, agency, or court concerning the same 'particular matter involving specific parties' (e.g., the same contract or grant) with which the former employee was involved while serving the Government. If the matter was pending under the employee's official responsibility during the employee's last year of Government service, the bar lasts for two years. If the employee participated in the matter 'personally and substantially,' the bar is permanent." e Times report included this statement from Richard W. Painter, a law professor at the University of Minnesota and former chief ethics lawyer at the White House under President George W. Bush: "With respect to Stevens, Parrott and probably Berman, it appears that these officials participated personally and substantially in the administration's decisions about resolving the financial difficulties of Fannie and Freddie," Mr. Painter said. "is means that they each have a lifetime ban on representing back to the United States government on either of these two particular party matters involving Fannie and Freddie." Berman and Parrott claimed they did not advocate for their clients during any of the meetings discussing housing policy, e Times reported. "In the interview, Mr. Berman said he kept working on the project with administration officials not as an advocate but because of his 'contacts and granular knowledge of what was going on.' "Mr. Parrott also said his meetings did not involve advocacy on behalf of his clients. 'I give them a sense of how people are thinking and how things are likely going to develop in their world,' he said." e MBA reacted angrily to e New York Times story, posting the following statement on its website: "is story lacks substance and merit and thus is completely pointless. MBA advocates tirelessly on behalf of all of its members, both large and small, who represent the entire real-estate finance industry. At no point during David Stevens' tenure in the government and now as president and CEO of the Mortgage Bankers Association, did he ever violate any ethics statute." Stevens responded to the Times story in a blogpost on MBA's website, stating: "Let me say emphatically and categorically — I took great care to adhere to all ethics rules and have never done anything unlawful. Every step of the way, from the moment I was first contacted by MBA through today, I have worked closely with lawyers at HUD and continued to consult with counsel while at MBA to make sure every action I took did not even approach the ethical or legal line. At every turn, I erred on the side of caution." Bill Cosgrove, CMB, immediate past chairman of the MBA and President & CEO of Union Home Mortgage, Strongsville, Ohio, stated: "MBA, and Dave Stevens in particular, have been staunch advocates for small lenders and the allegations in this storybook view could not be further from the truth. As the owner of a small independent mortgage bank, and having been involved in MBA leadership for over a decade, I have watched as MBA consistently fights on behalf of all of its members, regardless of size or business model." Tim Pagliara, founder and chairman of Investors Unite, a coalition of more than 1,100 Fannie Mae and Freddie Mac investors, told DS News: "I'm not surprised. A lot of the movement to shut down the GSEs has been, on one level, irrational. ere's been a lot written about it. I think when you follow the money and the conflicts emerge, you see that it has less to do with policy than it does to do with the greed and arrogance of those that are trying to push their narrative." Many have questioned whether such a "revolving door" between the private and public sectors when it comes to housing finance policy is ethical, or even legal.

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