News

City Council Member Applauds HUD Announcing Changes to Mortgage Sale Program
Date:  7/5/2016
ArticleType:  Press Release

City Council Member Applauds HUD Announcing Changes to Mortgage Sale Program

Agency Puts Greater Priority on Non-Profit Ownership and Foreclosure Avoidance

St. Petersburg, Fla. (July 1, 2016) – The U.S. Department of Housing and Urban Development (HUD) has announced significant improvements to their delinquent mortgage sales program. The changes include:

    • Making principal reduction the first strategy in modification processes
    • Increased non-profit participation - with a goal of tripling the number
    • Far greater provisions for transparency in the sale process
    • A commitment to work with local governments and non-profits on targeted sales

These reforms come on the heels of an aggressive community pressure campaign, led by local elected officials affiliated with Local Progress, a national network of progressive elected leaders, and community groups affiliated with the Center for Popular Democracy.

Earlier this year, the St. Petersburg City Council passed a Resolution calling on HUD to make reforms along these lines. In September of 2015, local officials from across the country traveled to Washington, D.C. to join others in meeting with top officials at HUD about this issue.

St. Petersburg City Council Member Karl Nurse commented about the changes announced June 30, “This milestone illustrates the value of cities collectively speaking up. We applaud these HUD changes to the mortgage sale program – changes that will go a long way to assist us with our foreclosure prevention efforts.”

Last summer, Local Progress members led a successful effort to get a Resolution passed at the June meeting of the U.S. Conference of Mayors, calling on HUD to prioritize selling these troubled mortgages to mission-driven purchasers, not Wall Street speculators.

With public events, reports and lobbying, these leaders put HUD, and specifically its head Secretary Julián Castro, in the spotlight for running a program that has been benefitting Wall Street at the expense of communities. HUD’s “Distressed Asset Sales Program” (DASP) has been conducting bulk auctions of delinquent mortgages to the highest bidder, which has meant 98% of these troubled mortgages have been sold to Wall Street speculators.

Local elected leaders and stakeholders now plan to make sure that HUD sells delinquent mortgage pools to mission-driven purchasers.

The persistence of local elected officials and community groups has paid off, and the major changes announced today are proof of their hard work. This campaign proved particularly timely as prominent Wall Street speculator Blackstone has recently become the largest single family landlord in the country. With more homes in the hands of non-profits instead of Wall Street speculators, communities will gain further control over their neighborhoods and be less at the mercy of Wall Street. Leaders from the Center for Popular Democracy and Local Progress plan to continue to apply direct pressure on HUD on this issue, and continue the fight for housing justice and community control to strengthen and protect neighborhoods across the country.

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