The Department of Housing and Urban Development’s own counsel is reportedly concerned that Trump administration-induced staff cuts could disrupt mortgage operations and increase fraud and litigation risks.
The revelations stem from an internal HUD document seen by Bloomberg Citylab, according to an article published Thursday. Staff departures at the regulator could allegedly “greatly delay”‘ or disrupt efforts such as loan underwriting, processing mortgage insurance claims and closing apartment building sales.
The outlet reports HUD’s Office of General Counsel drafted the memo, as the department prepares for an audit by the Government Accountability Office. Senate Democrats in April asked the nonpartisan federal agency to review their concerns over rumoured staffing slashes at HUD’s Office of Fair Housing and Equal Opportunity.
A spokesperson for GAO Thursday confirmed it accepted the audit request by Democrats, but said the office could not provide estimates on a completion date.
Neither spokespeople for HUD nor for Sen. Elizabeth Warren, ranking member of the Banking, Housing and Urban Affairs Committee, responded to National Mortgage News’ requests for comment Thursday. Bloomberg said HUD declined to confirm or comment on the memo, but described routine staff departures and restructuring.
How HUD is changing under Trump
HUD Secretary Scott Turner has vowed to remake the department under President Trump’s vision, touting efforts to eliminate fraud, waste and abuse in his first months in charge. While HUD has confirmed few details about its shakeup, the cost-cutting Department of Government Efficiency task force claimed to have terminated over 100 vendor contracts at the department, for savings of over $100 million.
The regulator also hasn’t disclosed how its ranks have changed, but posted to X in March that 7.4% of its workforce utilized the administration’s Deferred Resignation Program. A spokesperson for HUD told Bloomberg that 2,300 employees were “voluntarily taking the opportunity to find a new path.” The Equal Opportunity Employment Commission counts 9,442 permanent workers at the department currently.
The loss of lawyers, forensic accountants, data scientists and other analysts at HUD will increase the risk of fraud, corruption and other predatory practices, according to the memo. A reported 39% of staff have left HUD’s Office of General Counsel since Jan. 21, the day after Trump’s inauguration.
Further layoffs at the agency appear likely, should the Trump administration’s recommendations for discretionary spending pass.
The government is proposing a 43% budget reduction, or $33.6 billion slash to HUD’s $77 billion budget in fiscal 2026. While Turner has said the cuts will thoughtfully consolidate existing programs, elected officials have criticized the proposed elimination of some affordable housing programs.
