SBA's Preston Heads to HUD

Small Business Administration head Steven Preston was sworn in today as the secretary of the U.S. Dept. of Housing and Urban Development, where he will serve as the administration's point man on the slumping housing market and subprime lending crisis.

Preston is likely to be lead negotiator as Congress and the White House work on legislation to allow the Federal Housing Administration to insure up to $300 billion in refinanced mortgages, including many in which the mortgages exceed the value of the homes.

SBA Deputy Administrator Jovita Carranza is expected to be elevated to the head post at the SBA.

In other SBA news, Sens. John Kerry (D-Mass.) and Olympia Snowe (R-Maine) this week asked the Government Accountability Office to investigate the agency's lender oversight system. A recent inspector general's report found "major weaknesses" in the SBA's lender oversight and detailed how the agency's lax oversight of four lenders led to a loss of $329 million for the SBA's largest loan program.

The senators, who chair the Small Business and Entrepreneurship Committee, asked the GAO to examine the SBA's system for monitoring SBA lenders' portfolios and identifying risky lenders.

By Sharon McLoone |  June 6, 2008; 5:57 PM ET Policymakers
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