Housing advocates have attracted a prominent ally in their push to change the federal government’s policy of selling distressed mortgages at a discount to private equity firms and hedge funds, the New York Times reported today. Sen. Elizabeth Warren (D-Mass.) joined other lawmakers, advocates and community activists yesterday in a Washington, D.C. rally to oppose the loan sale program. The senator called on the Department of Housing and Urban Development and the Federal Housing Finance Agency, the overseer of Freddie Mac and Fannie Mae, to make it easier for nonprofit organizations to bid for the bundles of distressed mortgages put up for auction. The sale of distressed mortgages by HUD and the government-sponsored mortgage finance firms has been drawing growing criticism from housing advocates and lawyers in recent months. The critics are concerned that private buyers of distressed mortgages are moving too quickly to put borrowers into foreclosure instead of modifying the loan terms as housing officials had hoped.
