Banks helped create the housing crisis, and now they're seeking a new way to profit from it. As
Bloomberg reported Monday, several financial and investment companies have submitted proposals to the federal government, suggesting ways that they can help manage a program to rent out 180,000 foreclosed homes.
Fair and affordable housing advocates are calling on the Obama administration to reject help from the financial sector, or at least limit its influence.
"It's really a question of whether the banks that made so much money creating this crisis are going to profit again," Jeremy Rosen, policy director at the National Law Center on Homelessness and Poverty, told The Huffington Post.
More than 4,000 companies, organizations and individuals submitted ideas to the federal government this fall,
Bloomberg reported. Of those, about 400 proposals are considered valid. UBS, Deutsche Bank AG, Barclays Capital Inc. and others submitted ideas, according to Bloomberg.
The National Law Center on Homelessness and Poverty also registered its suggestions, Rosen said.
Perhaps most notable is a proposal from Fortress Investment Group, LLC, a private equity firm helmed by former Fannie Mae CEO Daniel Mudd. Earlier this month, the
SEC sued Mudd for alleged wrongdoing during his tenure at Fannie, claiming that he lied about the amount of risk the mortgage finance giant was taking on during the housing boom. Many of the foreclosed homes now owned by the federal government had mortgages underwritten by Fannie. In proposing to help the government unload those homes, Mudd would be profiting off a problem he may have helped to fuel.