Last month, HUD announced more than 10 changes to the program, including a requirement that buyers of Federal Housing Administration-insured nonperforming loans evaluate borrowers for principal reductions.
“Certain families with distressed mortgages insured by FHA
may soon be eligible for a reduction of their outstanding loan amounts should their mortgages be sold through the Distressed Asset Stabilization Program,” HUD announced in a press release.
The new regulations would also prohibit buyers of nonperforming loans from abandoning vacant properties and require the FHA
to release performance data on each pool of loans bought by investors.
But Rep. Jeb Hensarling (R-Texas) said the policy changes would help special interests ar he expense of taxpayers. A press release from the House Financial Services Committee posits that HUD Secretary Julian Castro pushed the changes “to appease liberal critics and bolster his chances of being selected as Hillary Clinton’s running mate.”
“Hardworking taxpayers deserve to know why Secretary Castro suddenly decided to expose them to greater losses and worsen the nation’s already unsustainable national debt,” Hensarling said Thursday. “The changes he’s making rig the program so certain buyers approved by Washington elites can receive steep discounts on properties and leave taxpayers holding the bag.”
Hensarling also accused Castro of pushing the changes to further his own career.
“There have been several media reports that these changes are motivated not by what’s best for taxpayers, but by what’s best for the Secretary’s future ambitions,” he said. “The timing and impact of these changes certainly raise legitimate questions that need to be answered.”
The chairman of the House Financial Services Committee has denounced major policy changes that the Department of Housing and Urban Development is making to the sale of government-insured nonperforming loans.