Housing Secretary Ben Carson confuses real estate term "REO" with "Oreo"
Housing and Urban Development (HUD) Secretary Ben Carson was quizzed at a hearing on Capitol Hill Tuesday, resulting in yet another viral moment for the cabinet official. Appearing before the House Financial Services Committee for an oversight hearing, Democratic Rep. Katie Porter asked Carson to help define what "REOs" are.
For those not in well-versed in housing terminology, "REO" stands for "real estate owned" — a term used to describe foreclosed property that has been transferred back to a bank or lender after an unsuccessful auction. Banks will typically sell REO properties as-is, meaning the buyer buys the home and all the problems along with it.
Carson, however, appeared to have misheard Porter, thinking she was referring to the delicious chocolate sandwich cookie.
"An Oreo?" Carson responded.
"No, not an Oreo, an R-E-O," Porter spelled out.
What followed was an awkward back and forth with the congresswoman as Carson appeared to not know what REO stands for, responding: "Real estate?"
"What does the O stand for?" Porter probed.
"Organization?" Carson suggested. Porter retorted: "Owned. 'Real estate owned.' That's what happens when a property goes into foreclosure. We call it an REO."
Porter explained that loans backed by the Federal Housing Administration (FHA) go into foreclosure and become REOs at a higher rate than loans issued by Fannie Mae or Freddie Mac, meaning homeowners with FHA loans are more likely to lose their homes to foreclosure. She pressed Carson to explain why people with FHA loans are losing their homes with "stains to their credit."
Carson poked fun at his slip-up after the hearing, tweeting a photo of a pack of Oreos and a handwritten note to Porter.
