HUD Ignored Procedures in Selling Distressed Mortgages, Report Says<br />HUD, in a response to the Inspector General report, said it had established rules and procedures for the mortgage sales but conceded<br />that they were not “formalized in one single centralized document.” The housing agency said it was currently working toward putting all those rules and procedures into a single handbook to address the concerns raised by the report.<br />“This is an $18 billion program that has ramifications for stakeholders, and they didn’t notice and comment.”<br />Ms. Lynch said her organization, in light of the report, was considering amending the lawsuit to add a claim<br />that HUD violated standard administrative procedures in going forward with the mortgage sales.<br />But Geoff Walsh, a lawyer with National Consumer Law Center, said the housing agency was inviting a potential legal challenge to any future<br />sales if it did not now follow proper rule-making for administrative programs by giving homeowners and advocates a chance to comment.<br />By MATTHEW GOLDSTEINJULY 25, 2017<br />A federal housing agency that sold 108,000 distressed mortgages to private equity firms<br />and hedge funds did so without following the proper rules for setting up the program, a government audit has found.
