HUD and FHFA are selling pools of very delinquent mortgages (tied to struggling homeowners!) to companies that contributed to the housing crash, have been found guilty of defrauding the government and taxpayers, and are working against the interests of homeowners and neighborhoods.
RBS (Royal Bank of Scotland) Securities, bought 5,000 Non-Performing Loans (NPL’s) from HUD.
- In early May of this year, a Federal judge ruled that RBS broke the law, misleading housing agencies Fannie Mae and Freddie Mac by selling them mortgage bonds that involved loans that were improperly underwritten.
- Also in May of this year , the bank pleaded guilty to criminal charges for colluding with other banks to rig the foreign exchange currency rates to enrich themselves at the expense of their clients and – as the foreign exchange currency rates affect global commerce – the global economy.
The Loan Star Fund, a private equity firm owned by a Texas billionaire, has bought over 22,000 NPL’s from HUD and FHFA.
- Their servicing arm is offering homeowners 5 year “interest-only” modifications that revert back to their original terms after 5 years, have no principal reduction and large balloon payments tacked on at the back.
Bayview Acquisitions LLC, connected with the Blackstone Group, has bought 24,000 NPLs from HUD and FHFA.
- Blackstone, a global private equity firm, is now the largest landlord for single family rentals in the country, and their performance managing properties has been abysmal. Tenants across the country are faced with poor maintenance & repairs, poor customer service and misrepresentations.
HUD and FHFA have the opportunity to sell these mortgages to large, non-profit, Consumer Financial Development Institutions that are modifying mortgages with principal reduction and creating affordable housing. Entities that are committed to strengthening communities, not destroying them. These entitites have raised the capital to pay fair market for the mortgages, but private equity firms and hedge funds are beating them to the punch.
If this concerns you, please consider sending an email to senior staff at HUD and/or FHFA asking them if there’s a way to sell the troubled mortgages to entities that want to help homeowners stay in their homes and that have a property disposition plan designed to meet the needs of communities.