An alliance of liberal groups is collaborating to launch an attack on Housing and Urban Development Secretary Julián Castro in an attempt to proactively block him from becoming Hillary Clinton’s vice president pick, alleging he sold delinquent mortgage loans to Wall Street.
Politico reported Tuesday that the group was circulating petitions to millions of people with the unambiguous aim to "publicly discredit Castro as a progressive, latching onto the mortgage issue to seed enough suspicion to keep him off Clinton’s shortlist."
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The group also created a website called "Don’t Sell Our Homes to Wall Street" targeting Castro’s mortgage sales.
At issue is the Distressed Asset Stabilization Program, started in 2010 to allow mortgages going toward foreclosure to be sold to what HUD calls "qualified bidders and encourages them to work with borrowers to help bring the loan out of default. The progressives attacking Castro say they believe the mortgages should be sold instead to nonprofits and other institutions that would care more about the communities involved. What Castro’s done, they say, has essentially amounted to a fire sale for Wall Street firms.
The group contends on its site that under Castro’s direction, HUD has sold 98 percent of its overdue mortgage loans to Wall Street at discounted prices averaging to nearly half off. HUD told Politico these figures were "way off."
The coalition also includes Presente.org, which Politico described as "the nation’s largest Latino organizing group that focuses on social justice." Politico reported that many of the organizations involved are backing Sen. Bernie Sanders (I, Vt.) for the Democratic presidential nomination.
"All year, we've seen the candidates tripping over themselves to show how tough they'll be on Wall Street," Kurt Walters, the campaign manager for nonprofit group Root Strikers, told Politico. "Then to turn around and take a step backward on that exact question, and put someone who has been doing the exact opposite – I think it would be tough for a lot of people who care about Wall Street accountability to get excited about that pick."
Rep. Raúl Grijalva (D, Ariz.), who has endorsed Sanders, criticized HUD’s mortgage program in a letter to Castro last week.
"Your own Distressed Asset Stabilization Program, which was designed to help right the wrongs of the meltdown years, has been selling homes that once belonged to the families I’ve spoken with at rock-bottom prices to the Wall Street entities that created this situation in the first place," Grijalva wrote, according to letter initially obtained by Politico.
Castro’s name has been widely circulated as a potential vice president pick for Clinton after he stumped for the former secretary of state in Iowa, Maine, and Nevada earlier this year.