Julian Castro, the House and Urban Development secretary who is considered a possible running mate for Hillary Clinton, faced tough questions Wednesday from congressional Republicans charging him of changing federal mortgage policy to placate left-wing groups.
In changing the rules for selling distressed mortgages to favor nonprofit groups over financial companies, Castro was on the verge of turning the agency’s housing insurance programs “into a social program designed to help special interest groups,” House Financial Services Committee Chairman Jeb Hensarling said.
The groups that would stand to gain from the changes are Castro’s “known political allies,” and Castro is breaching his duty to taxpayers by making the change, Hensarling said.
Castro, the former San Antonio mayor who was appointed as HUD secretary by President Obama in 2014, has frequently been mentioned as a possible vice presidential selection for presumptive Democratic nominee Hillary Clinton.
Yet in the spring he was criticized by liberal groups who faulted his agency for a program involving sales of distressed mortgages to outside bidders. The groups, with prominent liberals such as Sen. Elizabeth Warren, D-Mass., raised concerns that most of the sales were going to banks and financial companies, rather than to nonprofit groups.
In April, HUD announced a change in the rules to encourage more sales to nonprofits.
On Wednesday, Castro flatly denied that the change had anything to do with political calculations. Instead, he said, it was done because the best nonprofit bidders had a better track record of helping borrowers avoid foreclosure.
He also argued that, “as someone who is proud of being liberal,” he has a responsibility not just to protect taxpayers but to make sure that programs are “operationalized” in a way that helps homeowners avoid foreclosure.
