HUD Secretary Orders Outside Review of Bid-Rigging Allegations

Housing Secretary Henry Cisneros has announced a second investigation into allegations of bid-rigging and undue Wall Street influence in his agency's multibillion-dollar mortgage auctions.

A statement issued by the Department of Housing and Urban Development said Mr. Cisneros has asked for an internal examination that would use consultants.

"To ensure public confidence in our programs, I have ordered an independent review by a team of outside experts to evaluate and recommend any necessary reforms," Mr. Cisneros said in a statement.

The mortgage auctions were part of a two-year FHA program to sell up to $11 billion in multi-family and single-family mortgages that had come into the agency's inventory, mostly because of defaults.

Mr. Cisneros defended the program, saying, "I believe our policy of note sales was the right one and has produced substantial savings, over $1.3 billion, for the country."