Wall Street bankers are back at it again, buying up people’s mortgages at discount prices from government agencies like the Department of Housing and Urban Development (HUD).
HUD is supposed to help homeowners stay in their home through its “Distressed Asset Stabilization Program.”
But instead it has been a giveaway for Wall Street: In 2015, 98% of homes sold through HUD’s DASP program went straight to Wall Street (15,309 out of 15,624).
These homes are often sold at steep discounts, averaging 45% off for some of the biggest banks on Wall Street.
Worse? A majority of the loans went to The Blackstone Group, a huge private equity company notorious for its foreclosures. Blackstone tenants have dealt with roach infestations, harassment, and even attempts at illegal evictions.
We’ve seen this story before. Wall Street rigged the economy to extract as much wealth as possible from ordinary homeowners – then crashed the global economy and forced taxpayers to bail them out.
Now, Representative Raul Grijalva has sent a formal letter to Secretary Castro urging him to fundamentally fix this program, turning it from a Wall Street giveaway to a way to stabilize struggling neighborhoods.
We agree. Secretary Castro should stop selling our neighborhoods to Wall Street.
Unfortunately, this Wall Street giveaway is not a fluke.
In 2015, Julián Castro’s HUD promised to sell more of its mortgages to nonprofit community-based organizations, under pressure from leaders like Sen. Elizabeth Warren – who said HUD was “lining up with the Wall Street speculators” with its DASP program.
Here’s the problem: Since making that pledge in April, 2015, HUD now sells MORE mortgages to Wall Street and a LOWER percentage to nonprofits.
Community Development Financial Institutions only got 1% of loans sold in 2015.
Julián Castro also made headlines in 2015 for changing the rules to allow banks guilty of felony charges to participate in HUD programs. This change earned criticism from leaders like Sens. Sherrod Brown and Elizabeth Warren.
Secretary Castro is widely seen as a rising political star and many people think he is destined for higher office in Washington.
But first he needs to fulfill his mission as the leader of HUD and stabilize communities by refusing to sell our neighborhoods away to Wall Street for a discount.
Sign the petition to demand that Secretary Castro immediately ceases HUD mortgage sales until he can ensure the loans will be sold to nonprofit and mission-driven organizations and qualified buyers meeting high standards, not just reckless Wall Street banks.