HUD Ignored Procedures in Selling Distressed Mortgages, Report Says
- 7 years ago
HUD Ignored Procedures in Selling Distressed Mortgages, Report Says
HUD, in a response to the Inspector General report, said it had established rules and procedures for the mortgage sales but conceded
that they were not “formalized in one single centralized document.” The housing agency said it was currently working toward putting all those rules and procedures into a single handbook to address the concerns raised by the report.
“This is an $18 billion program that has ramifications for stakeholders, and they didn’t notice and comment.”
Ms. Lynch said her organization, in light of the report, was considering amending the lawsuit to add a claim
that HUD violated standard administrative procedures in going forward with the mortgage sales.
But Geoff Walsh, a lawyer with National Consumer Law Center, said the housing agency was inviting a potential legal challenge to any future
sales if it did not now follow proper rule-making for administrative programs by giving homeowners and advocates a chance to comment.
By MATTHEW GOLDSTEINJULY 25, 2017
A federal housing agency that sold 108,000 distressed mortgages to private equity firms
and hedge funds did so without following the proper rules for setting up the program, a government audit has found.
HUD, in a response to the Inspector General report, said it had established rules and procedures for the mortgage sales but conceded
that they were not “formalized in one single centralized document.” The housing agency said it was currently working toward putting all those rules and procedures into a single handbook to address the concerns raised by the report.
“This is an $18 billion program that has ramifications for stakeholders, and they didn’t notice and comment.”
Ms. Lynch said her organization, in light of the report, was considering amending the lawsuit to add a claim
that HUD violated standard administrative procedures in going forward with the mortgage sales.
But Geoff Walsh, a lawyer with National Consumer Law Center, said the housing agency was inviting a potential legal challenge to any future
sales if it did not now follow proper rule-making for administrative programs by giving homeowners and advocates a chance to comment.
By MATTHEW GOLDSTEINJULY 25, 2017
A federal housing agency that sold 108,000 distressed mortgages to private equity firms
and hedge funds did so without following the proper rules for setting up the program, a government audit has found.