Secretary of Housing and Urban Development Alphonso Jackson announced today he will step down next month in the face of investigations involving allegations of favoritism and calls from Democrats for his resignation.

Jackson’s resignation, effective April 18, leaves open the possibility that HUD will be led by an interim chief in the final months of a lame-duck administration, even as the department implements a major expansion of FHA loan programs and pushes for an overhaul of the Real Estate Settlement Procedures Act, or RESPA.

In announcing his resignation, Jackson made no mention of four ongoing investigations involving allegations of favoritism at HUD, including claims that he steered contracts to friends through housing authorities in New Orleans and the U.S. Virgin Islands.

"There comes a time when one must attend more diligently to personal and family matters," Jackson said in a statement. "Now is such a time for me."

After Jackson refused to answer questions about such allegations at a March 12 Senate Banking Committee hearing on HUD’s budget, Democrats Chris Dodd and Patty Murray drafted a letter to President Bush demanding his resignation.

With the nation "in the midst of a housing crisis," Dodd and Murray said, "the American people do not need a HUD secretary that is distracted by the clouds of Justice Department investigations and reports of an empanelled grand jury."

Jackson joined the Bush administration in June of 2001 as HUD’s deputy secretary and chief operating officer, taking over as acting secretary after his predecessor, Mel Martinez, resigned in December 2003 to run for the Senate. Jackson was sworn in as the nation’s 13th housing secretary on April 1, 2004.

In a statement, President Bush said he accepted Jackson’s resignation "with regret," calling him "a great American success story. Bush said he and his wife "treasure our strong friendship with Secretary Jackson, his wife Marcia, their daughters Annette and Lesley, and their granddaughter Lauren. We wish them all the best."

In announcing his resignation, Jackson took credit for overseeing internal changes at HUD’s Federal Housing Administration (FHA) that "led to a revival of FHA and the opportunity for more homeowners to obtain safer, more affordable mortgages."

This month FHA implemented temporary increases in loan limits in every housing market that it estimated will allow nearly 240,000 additional families to take advantage of the government-backed mortgage insurance program. The new limits, based on median home prices, range from a floor of $271,050 up to a cap of $729,750 in the highest-priced markets (see Inman News story).

Applications for home loans insured by FHA are at a four-year high, Jackson said, and the creation of the new FHASecure program in September has helped more than 130,000 families refinance out of subprime loans, he said.

Jackson also led the Bush Administration’s efforts on Capitol Hill to further modernize FHA loan guarantee programs by raising loan limits, introducing risk-based pricing and reducing minimum down-payment requirements. The House and Senate have both passed FHA modernization bills, but differences in the bills must be reconciled before they are sent to the president’s desk for approval (see Inman News story).

In addition to FHA modernization, HUD this month rolled out a new RESPA reform proposal that’s intended to simplify loan disclosures and make it easier for consumers to comparison shop for mortgages and settlement services like title insurance (see story). The industry is expected to fight aspects of the plan that would serve as incentives to package settlement services with mortgage loans (see special report).


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