For at least his first year as head of the Mortgage Bankers Association (MBA), David Stevens will be barred from lobbying the federal agency that matters most to many of the trade group's members: the one he's leaving.

Stevens, who last week announced he would step down in mid-April as assistant secretary for the Department of Housing and Urban Development (HUD) and commissioner of the Federal Housing Administration (FHA), will join the MBA as president and chief executive June 1, the group said Tuesday.

"There is a year that he cannot engage with HUD but he can talk to them casually," said David Kittle, senior director of industry relations at IMARC, a mortgage fraud investigation company, and a former MBA chairman who serves on the trade group's nominating committee.

Federal ethics rules restrict senior government officials from lobbying their former agencies for one year after leaving in a "cooling off" period to avoid the appearance of a conflict of interest.

However, when President Obama took office, he extended those restrictions to two years for senior government employees. The rules do not limit what business or group a government official can work for but rather what they can do when once they get there, said a spokesman for the Office of Government Ethics.

Before accepting the MBA job, Stevens worked with HUD's general counsel to make sure he followed any ethics rules, a HUD spokesman said. There also are conflict-of-interest restrictions on negotiating future employment while serving as a public official.

Stevens also may have to recuse himself on a wide range of matters involving HUD beyond simply having an arm's-length relationship with his former agency, the HUD spokesman said.

The FHA has grown in importance during the housing crisis and now insures 30% of all mortgages, up from just 3% in 2006. In addition, HUD is involved in a wide range of issues that the MBA regularly deals with, including the Real Estate Settlement Procedures Act rules covering mortgage disclosures and consumer protections under the Truth-in-Lending Act.

Hence it will be a delicate balancing act for Stevens to avoid discussing issues any matters involving HUD or the FHA in his new job, some mortgage lenders said.

"FHA is the primary take-out for purchase money business, so the MBA would be interested in that," said David Zugheri, president of the Houston lender Envoy Mortgage. "Will he find himself at a table with people from his former employer? No question. How do they get around that?"

Zugheri said that even though the MBA has its own team of lobbyists, Stevens "could sit back and not physically approach anyone, but could he influence lobbying efforts? The answer to that is, 'I'm sure.' "

The MBA did not respond by press time to calls seeking comment. Stevens will succeed John Courson, who joined the MBA as chief operating officer in 2008, and helped return the trade group to profitability.

Jan Witold Baran, who heads the government ethics practice at Wiley Rein & Fielding in Washington, said Stevens will be restricted from lobbying HUD, the FHA or the Obama administration, but he can still lobby Congress.

"He's barred from representing them [the MBA] back to his original agency under the law but he also is subject to an ethics pledge under the Obama administration executive order which prevents him from lobbying the administration during the duration of the presidency," Baran said.

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