Joint Press Release: Mayors from 18 Cities Call for an End to Fire Sales of Distressed Housing Assets to Wall Street Speculators

Following the release of a report by the Center for Popular Democracy and the ACCE Institute detailing sales of troubled mortgages to faulty players, mayors from across the country are calling for mortgage owners and holders to prioritize the sale of troubled mortgages to good actors who can help homeowners struggling in the aftermath of the crisis.

On a press briefing call at 1:30pm Eastern Thursday, June 18th, Mayor Ras Baraka of Newark NJ, Mayor Betsy Hodges of Minneapolis, MN and Vice Mayor Jael Myrick of Richmond CA described how this issue has impacted their cities and why they are coming together with other cities to call on the banks and government agencies to change course and sell delinquent mortgages to non-profits.

At the annual U.S. Conference of Mayors meeting June 19-22nd a Resolution co-sponsored by 18 Mayors will call on HUD, Fannie Mae, Freddie Mac and major banks to prioritize selling very delinquent mortgages to non-profits forforeclosure prevention and affordable housing strategies, instead of to speculators. Specifically, the mayors are calling for these mortgages to be sold t non-profits with a program and plan to attempt modifications with principal reduction and, when foreclosure cannot be avoided, a housing disposition plan tailored to what the community needs.

In the wake of the foreclosure crisis, a hot market developed for “distressed housing assets” – both foreclosed homes and delinquent mortgages – and Wall Street speculators have become major owners of residential housing.  The Blackstone Group, a global private equity firm, is now the largest landlord in the country for single-family rentals.

Government agencies have fueled this Wall Street buy-up of housing through their bulk sale of very delinquent mortgages.  Since November 2012, HUD has auctioned off nearly 120,000 troubled mortgages and more recently Fannie Mae and Freddie Mac have begun similar sales.