In a July 2018 interview with HousingWire, FHA Commissioner Brian Montgomery stated that the FHA wants to bring big banks back to the FHA lending space by increasing transparency and decreasing False Claims Act (FCA) enforcement, which ballooned in the Obama era. Mr. Montgomery remarked on how unfortunate it is that big banks have thousands of locations and even more loan officers—the vast majority of which do not offer FHA loan products.

He attributed the sharp drop in the availability of FHA Loan products in recent years, in part, to the billions of dollars in  FCA settlements extracted from big banks in relation to their FHA loans. To counter this, he indicated that FHA lending could be brought back under the FHA’s jurisdiction and highlighted key moves by the administration, HUD, and the Department of Justice to dial back the use of the FCA. HUD Secretary Ben Carson has also been working with the DOJ to dial back the number of FCA complaints against FHA lenders.

By limiting FCA cases, Commissioner Montgomery wants to increase certainty and decrease the risk for lenders. Consumers who use such products generally present more risk to begin with. FHA loan products are designed to encourage lending to those consumers. Slapping lenders with huge penalties and fines for doing what the program was designed to do is no way to help consumers.

He made clear that FHA, HUD, and DOJ will not "look the other way" when confronted with fraud, but indicated that penalizing lenders for minor issues is no way to have a robust, transparent, and consumer-friendly system.