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Warren Demands HUD Curb Sales of Soured Loans to Private Equity

  • Senator says mortgage giants should help nonprofits buy loans
  • HUD has sold $17 billion of troubled loans in last five years

U.S. Senator Elizabeth Warren wants to restrict Wall Street firms from buying thousands of distressed home loans, the most prominent lawmaker to put pressure on the government to curtail the practice.

Massachusetts Democrats Warren and Representative Michael Capuano will hold a protest in Washington Wednesday to urge mortgage giants Fannie Mae and Freddie Mac as well as the Department of Housing and Urban Development to stop selling so many troubled loans to private equity firms and hedge funds, and instead make it easier for nonprofits to buy them. Investment firms have been rushing to foreclose on homeowners rather than modify their delinquent loans, the lawmakers said.