Plus it is a slap in the face to Sanders supporters considering some of his remarks....
And there's also this, which sounds too much like corruption as usual. He personally didn't initiate the policy. but it's an example how willing participation in the network of policies that screw us.
http://www.salon.com/2016/04/20/this_election_is_blinding_us_to_a_wall_street_outrage_inside_the_medias_negligent_response_to_a_foreclosure_disaster/
Politico won the day with the headline “Progressive groups target Julián Castro.” Progressive caucus co-chair Raul Grijalva had to explain to Buzzfeed that he wasn’t trying to torpedo Castro’s VP bid, entangling the entire matter with intra-Latino politics. Castro himself turned around the campaign, telling NBC News that he thought “it was really about politics and the presidential race and not really about the policy.”
This is dumb. Housing advocacy groups have been working on this issue since well before Castro became HUD Secretary in July 2014. They represent communities of color that have been devastated by foreclosures and are now seeing the same financial players who precipitated that crisis come back into their neighborhoods to wreak havoc. And at a time when they’ve begged for mortgage relief for troubled borrowers, they’re seeing that relief go to the Wall Street firms instead.
So what is this all about? In 2010, HUD (under its former Secretary Shaun Donovan) instituted the Distressed Asset Stabilization Program (DASP) to deal with seriously delinquent loans. HUD doesn’t originate loans, but the Federal Housing Administration, which it operates, insures mortgages for banks. When banks successfully file an insurance claim after a loan goes into default, the mortgage transfers over to HUD.......These mortgages, which are at least six months late, piled up on HUD’s books, so they created DASP to dispose of them. Under the program, HUD runs auctions to sell the loans in bulk, hundreds at a time, to the highest bidder.
.......Nearly all of these loan sales have gone to banks, hedge funds, or private equity firms, which have prospered from scooping up distressed loans at a discount after the crisis they helped cause. And they’re more interested in foreclosing on borrowers and developing the housing asset than stabilizing neighborhoods. Firms like Blackstone have become America’s largest landlords, buying single-family homes and renting them out at a profit. Often the homes are held vacant and flipped when neighborhoods gentrify.
“Hedge funds and private equity firms are getting these loans for cents on the dollar,” said Jonathan Westin of New York Communities for Change, one of the coalition partners in the campaign. “They’re getting the principal reduction that’s supposed to go to the homeowners, and they just pocket it and tell homeowners to pay up or get out.”
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