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art by Favianna Rodriguez

Art by Favianna Rodriguez

“ You cannot uneducate the person who has learned to read. You cannot humiliate the person who feels pride. You cannot oppress the people who are not afraid anymore. ” – César Chávez, UFW

HUD Secretary Julián Castro Under Fire in Cities Across the Country for Dragging His Feet on Promised Reform of Mortgage Sale Program

Distressed Homeowners to Castro: Do Not Come Back to Our Communities Until You Stop Selling Mortgages to the Wall Street Predators that Harmed Us

June 1, 2016

Washington, DC— From New York City to Los Angeles, HUD Secretary Julián Castro has a growing credibility problem. That’s because he has failed to overhaul a widely criticized HUD program that sells distressed mortgages to the same Wall Street investment firms that fueled the foreclosure crisis.

In cities across the country, advocates, homeowners, and community leaders involved with Don’t Sell Our Homes to Wall Street are ramping up their campaign against Castro, demanding that he follow through on his promise to reform how HUD handles mortgage sales.

In a major embarrassment for Castro, he is being told by fed-up Latino and African-American homeowners in various cities not to visit again until he stops the sale of mortgages to Wall Street predators. He will now face more angry homeowners any time he enters a community hit hard by the foreclosure crisis. Indeed, during his upcoming visit to Southeast Queens, the foreclosure capital of New York City, Castro will be met with protesters calling on him to step up and makes long overdue changes to the way HUD handles mortgage sales, ensuring that more homeowners facing foreclosure can get principal reduction and other relief from responsible actors.

Members of Don’t Sell Our Homes to Wall Street are also planning to shame Castro with a protest in front of HUD’s Washington office, where more than 100,000 petitions calling for reform to mortgage sales will be delivered. Over the past several weeks, the campaign secured the signatures for these petitions at DontSellourHomesToWallStreet.org, reaching 117,655 by last count.

For more than a year and a half, these community organizations have called for improvements to HUD’s mortgages sales that would ensure more homeowners are given principal reduction and that a much larger percentage of mortgages are transferred to nonprofit entities committed to rebuilding communities ravaged by foreclosures. In this effort, the campaign has garnered support from Elizabeth Warren, the New York Times editorial board, and 45 members of Congress who signed a congressional letter to HUD and the Federal Housing Finance Agency (FHFA) in March of this year.

“We demand better for our communities and will not accept housing policies that prioritize Wall Street profits over everyday people,” said Matt Nelson, Managing Director at Presente.org. "Sec. Castro should follow through on his promises and do right by Latinos and struggling homeowners across the country. This is an opportunity for him to either demonstrate strong leadership and accountability or sell out HUD to the same Wall Street predators who caused the foreclosure crisis and stole more than two-thirds of our collective wealth."

In April 2015, HUD pledged to prioritize sales to Community Development Financial Institutions (CDFIs). But since then, 98 percent of the mortgages sold – 15,309 out of 15,624 – went to Wall Street speculators such as private equity giant Blackstone. Only two percent was sold to CDFIs. More than half of the mortgages HUD trumpets as avoiding foreclosure end up in short sales or as “deeds-in-lieu”, where homeowners still lose their homes.
Castro and top officials at HUD have repeatedly promised to reform this giveaway to Wall Street but have yet to take the necessary action.

“Everyone seems to get it but Castro. Elizabeth Warren, dozens of members of Congress, and organizations across the country all agree it is wrong to allow bad actors on Wall Street to continue to reap big profits from distressed homeowners, many of whom are people of color living in major cities,” said Ana Maria , co-executive director for Center for Popular Democracy. “It’s time for Castro to do his job and fix a major crisis impacting countless Americans homeowners. Until he shows he can deliver leadership for distressed homeowners he shouldn’t visit our communities and expect a warm welcome.”

“Many of us were sold toxic loans and have been struggling to hold on to our homes and recover,” said Jose Vega, a community leader and struggling homeowner with Alliance of Californians for Community Empowerment (ACCE) Action. “Latinos and African Americas were targeted for predatory loans and have suffered through particularly high rates of foreclosures. It is shameful that, instead of helping us, Secretary Castro is helping Wall Street speculators make more money off our continued suffered. He should not come back to Los Angeles until he makes good on his commitment to stop selling mortgages to Wall Street.”

“Secretary Castro cannot continue to give away our homes and neighborhoods to Wall Street,” said Christina Winslow, a homeowner from Southeast Queens in New York City who lost her home to a short sale after Lone Star bought her mortgage. “I live in the foreclosure capital of New York City, and I need Secretary Castro to understand this campaign is about real people in communities like mine. When we needed his help we were pushed to the side and our homes were sold off to investors looking to make a quick buck. He should not visit Southeast Queens until he makes the improvements to mortgage sales he said he would deliver.”

The organizations involved in Don’t Sell Our Homes to Wall Street include: Alliance of Californians for Community Empowerment (ACCE) Action, CPD Action, Daily Kos, Democracy for America, MoveOn.org Civic Action, New York Communities for Change, Other 98% Action, Presente.org, RootsAction.org, Rootstrikers, and the Working Families Party.

Below is a chronology of the coalition’s efforts over the past year and a half:
- September 9, 2014: Community groups launch campaign and release report: Vulture Capital Hits Home: How HUD is Helping Wall Street and Hurting Our Communities.

- June 22, 2015: U.S. Conference of Mayors passes resolution that was co-sponsored by 17 Mayors from across the country.

- September 30, 2015: Community groups and local elected officials converge in D.C. Rally with Elizabeth Warren and Congressman Capuano, and meetings with senior officials at HUD and FHFA. Covered in Bloomberg and the New York Times.

- October 6, 2015: The New York Times editorial board says these sales should be suspended until government agencies put real reforms in place and actually increase the proportion of nonprofit buyers.

- March 1, 2016: Letter sent to HUD and FHFA signed by 45 Members of Congress.

- April 7, 2016: Rep. Grijalva's letter to Sec. Castro.

- April 12, 2016: Coalition launches petition at DontSellourHomesToWallStreet.org urging immediate changes to HUD’s mortgage sales, focused on Secretary Julian Castro, head of HUD.

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Presente.org is the nation’s largest online Latino organizing group; advancing social justice with technology, media, and culture.