HUD

Sep 23, 2015 ∞

The Government Is Selling Thousands of Homes to Hedge Funds Without Their Owners' Knowledge

Jared Bennett reports at The Atlantic:

It was a great deal for Oaktree. The fund bought the pool of mortgages for about two-thirds of the $105.7 million HUD estimated the homes were worth. [Julius] Uwansc, who now faces foreclosure through the new servicer of the loan, Selene Finance, was unaware that any of this had transpired.
“Whatever deal that went on between Bank of America, Selene and HUD is not known to me,” he says. Uwansc maintains he has complied with the terms of his modification and has filed lawsuits against both Bank of America and Selene.

I worked at the Philadelphia Housing Authority for almost seven years. Many of the programs run by the United States Department of Housing and Urban Development are poorly understood, even by the executives who are tasked with making use of them in their own cities. But many of those programs are also beneficial to the community, when properly utilized, and when the agencies involved take the time to explain the benefits to all of the stakeholders involved, from potential residents to the mayor.

Read the article at The Atlantic for full context, but it sounds to me like the program tdhis article covers, the Distressed Asset Stabilization Program, or DASP, is not being sufficiently overseen and participating investors are taking advantage of “flipping” strategies and rental demand, especially in cities full of once-again-rapidly gentrifying neighborhoods, like Philadelphia. The demolition of high-rise public housing buildings colloquially (and, I would suggest, derogatorily) known as “projects” and construction of row-home style mixed-income residential developments, had decreased crime, outstanding rent, utility costs and other “key performance metrics” even before I left in 2013.