45 members of Congress call for changes to sales of troubled mortgages to banks

Forty-five members of Congress — including several U.S. Representatives for New York — have signed on to a letter calling for changes to how bulk sales of distressed properties are sold by federal housing agencies, including disqualifying “bad actors” and making the programs more transparent.

The letter, sent on Tuesday and addressed to the heads of the U.S. Department of Housing and Urban Development and the Federal Housing Finance Agency, calls into question how the sales of troubled mortgages have been handled and the impact those sales have had on neighborhoods and communities. U.S. Reps. Hakeem Jeffries, Carolyn Maloney and Yvette Clarke were among the signatories from New York.

“We are concerned that this approach represents a huge missed opportunity to prioritize neighborhood stabilization, help alleviate the affordable housing crisis in communities across the country, and to work with organizations that have a track record of preserving homeownership,” the letter reads.

However, the letter praises the move by the FHA to do non-profit-only auctions as a “step in the right direction.”

The letter details recommendations for redesigning how troubled mortgages are packaged and sold.

You can read the full Congressional Letter to Watt and Castro.