Secretary of Housing and Urban Development and former San Antonio Mayor Julián Castro stopped by The Daily Show for a quick chat on Monday with Jon Stewart in New York amid the Winter Storm Juno.
“You are so much better looking than your brother,” Stewart started off with friendly banter.
But in classic Daily Show style, Stewart quickly dove into a series of questions about how the endlessly complex, and often laughable, bureaucratic system of American government works. On the table for this episode was President Barack Obama’s recent announcement of a reduction in mortgage insurance premiums available through the Federal Housing Administration (FHA).
If you missed Monday’s episode, you can watch it and the extended interview for free online on The Daily Show’s website.
“We call ourselves the ‘Department of Opportunity,’” said Castro, who has been HUD Secretary for about six months. “We haven’t put it on the building yet but that’s what we’re calling ourselves.”
The new premiums are intended to make it easier for middle-class Americans to refinance their mortgages and become first-time home buyers.
But that sounds like something that got us into trouble in 2008, Stewart said. “What’s different now? Why is FHA different and we shouldn’t worry?”
“FHA was not an institution that engaged in the riskier mortgage products,” Castro said. “A few years ago we were at one extreme; it was too easy to get a home loan in general. Today, it’s at the other extreme.”
The FHA will keep strong safeguards in place, Castro said, but this new program will save folks $900, on average, per year.
Stewart poked at Castro’s repetitive use of the phrase “strong trajectory” when describing the state of FHA’s $40 billion reserve, which does not meet the 2% capital reserve ratio.
“We’re at 0.41% but on a very strong trajectory to get to 2% within the next couple of years,” Castro said.
“We were bankrupt, but now we got walkin’ around money,” Stewart said.
We’re on a very strong trajectory towards our goal,” Castro said. “The landscape of lending and second mortgage products has changed for the better.”
It’s worth a watch. Just one caution, San Antonio: The former mayor didn’t mention his hometown. Here’s that link again to the extended interview.
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