WASHINGTON, D.C. – (RealEstateRama) — House Financial Services Committee Chairman Jeb Hensarling (R-TX) denounced major policy changes Housing and Urban Development Secretary Julian Castro is making to the sale of nonperforming loans insured by the government, saying the moves help liberal special interests at the expense of hardworking taxpayers. The changes would create “preferential bidding” options for certain buyers and restrict investor options in the program, which HUD originally designed to maximize recoveries of taxpayer losses on government insured loans.
Several media outlets have reported the policy changes were made in an attempt by Secretary Castro to appease liberal critics and bolster his chances of being selected as Hillary Clinton’s running mate.
Chairman Hensarling has called Secretary Castro to appear before the Committee at a hearing next Wednesday to answer questions about the impact of the policy changes on taxpayers. Back in March, Chairman Hensarling and Senate Banking Committee Chairman Richard Shelby (R-AL) sent a letter to Secretary Castro promising “immediate hearings…to investigate any changes made to these programs that would undermine their fundamental purpose or otherwise make unwise use of taxpayer dollars.”
Secretary Castro never responded to that letter, nor did HUD notify the Committee such changes were being contemplated.
“Secretary Castro was told months in advance that changes harming taxpayers would result in a congressional hearing, and we’re simply following through. 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. 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. 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. The timing and impact of these changes certainly raise legitimate questions that need to be answered,” said Chairman Hensarling.