Housing advocates and progressive groups have launched a coalition to change Agency distressed loan sales practices and require them to sell more delinquent loans to non-profits. The advocates tagged HUD’s Distressed Asset Stabilization Program a, quote, Wall Street Giveaway, close quote, because the majority of distressed loans sold through the program are bought by Wall Street investors.
The coalition’s efforts include a petition to HUD Secretary Julián Castro asking him to cease distressed loan sales through DASP until the program is reformed. HUD has made changes to the program in the last year that include setting aside pools of loans exclusively for purchase by non-profits and extending the foreclosure delay time from six months to a year.
A federal judge unsealed depositions related to Fairholme Funds’ lawsuit against the government over the sweeping of GSE profits into Treasury that may be undermining to the government’s position that the profit sweep was in fact a way to protect taxpayers. Testimony from key government officials reveals, however, that the government may have known in 2012 at the time the terms of the bailout agreement were amended that Fannie Mae and Freddie Mac were going to remain profitable for many years.