A coalition of 14 civil rights groups and housing advocacy groups had some harsh criticism for HUD Secretary Julián Castro earlier this month as they labeled HUD’s Distressed Asset Stabilization Program (DASP) a “Wall Street giveaway” for its tendency to sell delinquent mortgage loans to investors and private equity firms.
Some of the groups—even some that advocate for Latinos—even went as far as to say that Castro was unfit to be vice president of the United States, as the Secretary’s name has been floated for months as a possible running mate for Hillary Clinton on the Democratic ticket. The coalition circulated a petition demanding changes to DASP; as of Friday, the petition had gathered more than 115,000 signatures.
One Latino advocacy group has recently come to Castro’s defense, however. The CEO of Washington, D.C.-based National Association of Hispanic Real Estate Professionals (NAHREP), Gary Acosta, spoke out on the Secretary’s behalf.
“Secretary Castro is an outstanding leader with impeccable credentials and is more than qualified for any public office in America, including the vice presidency,” Acosta said. “Furthermore, the National Association of Hispanic Real Estate Professionals believes Secretary Castro has managed the office of HUD Secretary with the highest level of professionalism, skill, and integrity.”
At the same time, however, Acosta admitted that the coalition’s criticisms of DASP were not completely without merit. The main criticism of DASP has been that most of the distressed and deeply delinquent mortgages are sold to Wall Street investors and private equity firms who are more interested in profiting financially from the mortgage crisis rather than achieving the best outcomes for borrowers or stabilizing neighborhoods. In their petition, the coalition called for HUD to cease selling mortgages through DASP until the program is reformed to involve more non-profits and mission-driven groups.
Acosta cited independent studies that have shown as little as 10 percent of the homeowners in DASP have been able to live and maintain ownership of their homes.
“NAHREP supports the lending industry’s call for HUD to provide lenders with greater certainty and clarity, and believes that by doing so, HUD will help create greater access to affordable mortgage credit, while reducing the risk of predatory lending in our nation’s communities,” Acosta said.
In response to the coalition’s criticisms of DASP, a HUD spokesperson told DS News, “Providing an option for homeowners to remain in their homes is one of the reasons the DASP program was created. We’ve received feedback from stakeholders which has led us to make a number of important changes to the program including the creation of non-profit only pools and delaying foreclosure for a year. Additionally, we’re still evaluating further enhancements to the program to meet our core mission.”
In December 2014, Castro met personally with a coalition led by Americans for Financial Reform specifically to discuss DASP. The coalition was comprised of fair housing, civil rights, and consumer advocates. The meeting helped inform the changes HUD made to DASP in April 2015, according to HUD. Those changes included the aforementioned pools of loans set aside exclusively for non-profits and expanding the foreclosure delay time from six months to a year.
