Ben Carson HUD hearing qualifications_00000000.jpg
Pool
Ben Carson HUD hearing qualifications_00000000.jpg
Now playing
01:45
Dr. Ben Carson addresses HUD qualifications
President Donald Trump addresses the 73rd session of the United Nations General Assembly, at U.N. headquarters, Tuesday, Sept. 25, 2018. (AP Photo/Richard Drew)
Richard Drew/AP
President Donald Trump addresses the 73rd session of the United Nations General Assembly, at U.N. headquarters, Tuesday, Sept. 25, 2018. (AP Photo/Richard Drew)
Now playing
02:17
Trump claim to world leaders met with laughter
CNNMoney
Now playing
06:22
How Trump's tweet sparked #WhyIDidntReport
President Donald Trump points to the crowd after speaking to law enforcement officials on the street gang MS-13, Friday, July 28, 2017, in Brentwood, N.Y.
Evan Vucci/AP
President Donald Trump points to the crowd after speaking to law enforcement officials on the street gang MS-13, Friday, July 28, 2017, in Brentwood, N.Y.
Now playing
01:46
Trump's I'm-joking-but-not-really strategy
WASHINGTON, DC - DECEMBER 15:  U.S. President Donald Trump listens to a question as he speaks to members of the White House Press Corps prior to his Marine One departure from the South Lawn of the White House December 15, 2017 in Washington, DC. (Alex Wong/Getty Images)
Alex Wong/Getty Images
WASHINGTON, DC - DECEMBER 15: U.S. President Donald Trump listens to a question as he speaks to members of the White House Press Corps prior to his Marine One departure from the South Lawn of the White House December 15, 2017 in Washington, DC. (Alex Wong/Getty Images)
Now playing
01:20
Trump often says he's 'the least racist person'
CNN
Now playing
01:00
Trump on Manafort: I feel sad about that
Pool
Now playing
01:22
Trump on Cordray: He was groomed by 'Pocahontas'
Now playing
05:58
Baldwin: This face behind Trump startled me
CNN
Now playing
02:01
Trump responds to op-ed: 'Gutless'
CNN Illustration/Getty Images
Now playing
03:18
Why Woodward's book matters
CNN
Now playing
01:13
Dean: Trump acts 'frighteningly dictatorial'
WASHINGTON, DC - MAY 08:  U.S. President Donald Trump announces his decision to withdraw the United States from the 2015 Iran nuclear deal in the Diplomatic Room at the White House May 8, 2018 in Washington, DC. After two and a half years of negotiations, Iran agreed in 2015 to end its nuclear program in exchange for Western countries, including the United States, lifting decades of economic sanctions. Since then international inspectors have not found any violations of the terms by Iran.  (Photo by Chip Somodevilla/Getty Images)
Chip Somodevilla/Getty Images North America/Getty Images
WASHINGTON, DC - MAY 08: U.S. President Donald Trump announces his decision to withdraw the United States from the 2015 Iran nuclear deal in the Diplomatic Room at the White House May 8, 2018 in Washington, DC. After two and a half years of negotiations, Iran agreed in 2015 to end its nuclear program in exchange for Western countries, including the United States, lifting decades of economic sanctions. Since then international inspectors have not found any violations of the terms by Iran. (Photo by Chip Somodevilla/Getty Images)
Now playing
02:31
Woodward book reveals 'crazytown' White House
CNN Illustration/Getty Images
Now playing
03:03
Trump's latest Twitter tirade lashes at media
TOPSHOT - US President Donald Trump waits to speak during a memorial service at the Pentagon for the 9/11 terrorist attacks  September 11, 2017 in Washington, DC. / AFP PHOTO / Brendan Smialowski        (Photo credit should read BRENDAN SMIALOWSKI/AFP/Getty Images)
Brendan Smialowski/AFP/Getty Images
TOPSHOT - US President Donald Trump waits to speak during a memorial service at the Pentagon for the 9/11 terrorist attacks September 11, 2017 in Washington, DC. / AFP PHOTO / Brendan Smialowski (Photo credit should read BRENDAN SMIALOWSKI/AFP/Getty Images)
Now playing
01:57
Trump warns of violence if GOP loses midterms
Photo Illustration: Getty Images/CNN Business
Now playing
01:40
Trump: Impeach somebody who's done great job?
Fox News Channel
Now playing
01:19
Trump on Sessions: What kind of man is this?

Story highlights

It was a policy implemented in the final days of the Obama administration

"Had no idea," said one lobbyist with a laugh. "None."

(CNN) —  

The Trump administration’s decision to reverse a mortgage-fee cut intended to help low-income borrowers shouldn’t have been a surprise.

It’s a policy, implemented in the final days of the Obama administration, that runs afoul of conservative orthodoxy. Trump’s selection to run the Housing and Urban Development Department, Ben Carson, said he was disappointed in the move during his confirmation hearing. What’s more, it was a decision, announced by Obama’s HUD Secretary Julian Castro, which was made without consulting Trump’s team first, according to two people familiar with the matter.

But the speed with which it occurred – less than an hour after Trump took the oath of office last week – surprised even plugged-in lobbyists, congressional staffers and housing officials, according to a series of interviews with stakeholders by CNN.

“Had no idea,” said one lobbyist with a laugh. “None.”

“Wasn’t expecting it – and have absolutely no insight into how it all happened,” said another.

02:25 - Source: CNN
Trump meets with congressional leaders

“Knew it was coming eventually, but damn,” mused a congressional staffer. “That was quick.”

Carson hasn’t been confirmed yet. Trump still hasn’t even named his own Federal Housing Administration commissioner – the individual responsible for overseeing the portfolio the fees effect. Most interviewed were perplexed as to who at the agency actually had the power to pull the trigger on something like this.

The content of the Trump administration’s decision to reverse the decision, at least according to Democrats, was even more problematic. The cut itself is designed to ease the home buying process for first time and low-income homebuyers. It was a decision made amid intense pressure from advocacy groups, according to two people familiar with the process – one final effort by the administration to bolster that specific group of borrowers on Obama’s way out the door.

The Trump team’s move, especially so quickly after inauguration, infuriated Democrats.

“It took only an hour after his positive words on the inaugural platform for his actions to ring hollow,” Senate Minority Leader Chuck Schumer said on the Senate floor just a few hours later. “One hour after talking about helping working people and ending the cabal in Washington that hurts people, he signs a regulation that makes it more expensive for new homeowners to buy mortgages.”

Sen. Sherrod Brown, the top Democrat on the Banking Committee, tweeted shortly after: “Making it more expensive for Americans to buy their first homes is not the way to make Washington work for people.”

But Trump’s team, in part out of necessity, and in part, according to sources, to make a point to the departing team at the organization, was prepared to pull the trigger on the shift as soon as Trump placed his hand on the two bibles he used for his swearing in.

The primary reason the action was taken immediately was simple, according to multiple people familiar with the process: because it could be done immediately. Unlike most federal rule changes, HUD can operate not only unilaterally on the decision, but without going through traditional rule-making process of doing things like placing the change in the Federal Register for review. A simple letter informing stake holders is all it took to take the action. No official rule-making. No executive orders. Just a letter.

02:07 - Source: CNN
Trump signs 3 executive actions

It was also done for marketplace reasons. The cut was supposed to take effect on January 27. If the decision was going to be made, better to make it before lenders started utilizing the cut than after.

“They did it this way so, quite frankly, all the lenders brokers and machinery didn’t bake the wrong premiums into the cake,” said Douglas Holtz-Eakin, the former chief economist of President George W. Bush’s Council of Economic advisers and then director of the Congressional Budget Office. “This is the efficient way to get it fixed as opposed to put it into effect” and having lenders have to backtrack later.

The move was also deliberately telegraphed in advance, according to one official who worked on the process.

Two GOP senators made a point of asking Carson questions about the issue during his confirmation hearing – an effort to lay the groundwork for the eventual move, the official said.

Republicans had made no secret of their disdain for the Obama administration’s decision. The reasons are two-fold: The cut reduces the government’s cushion backing the mortgages. By targeting lower-income borrowers, it also makes the makeup of the risk pool worse. Even lobbyists whose members would benefit from the cut knew where things were headed under Trump.

“It was relatively clear where a lot of Republicans in Congress stood,” one told CNN.

Trump’s landing teams, which had arrived at HUD weeks ago, had targeted the reversal early on the process, a person familiar with the process said.

Apart from the logistical and policy reasons, another was general frustration with Obama’s decision to make the cut at all. Obama’s team hadn’t consulted with Trump’s before making the move – or even told them it was coming, the person said. Carson hinted at that frustration during his confirmation hearing.

“I was surprised to see something of this nature done on the way out the door,” he told lawmakers.

As to who actually did it?

Genger Charles, HUD’s general deputy assistant secretary for Housing, signed the letter and is one of the agency’s staffers the Trump administration has asked to stay on for at least the near term. Widely respected internally, Charles sent the letter because of her position at the agency. The decision itself was made by Trump’s incoming team explicitly, even as where many will end up is still largely unknown or still in the works.

Still, as one put it bluntly (and accurately): “We’re in charge now.”