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Amid VP Chatter, Castro Defends Changes to HUD Mortgage Program

U.S. Housing Secretary Julián Castro on Wednesday defended his overhaul of a federal program that sells bad mortgages to private investors, rejecting the idea it was driven by politics.

HUD SECRETARY waits behind the stage at the Texas Democratic Convention on June 17, 2016

U.S. Housing Secretary Julián Castro on Wednesday defended his overhaul of a federal program that sells bad mortgages to private investors, rejecting the idea it was driven by politics as Hillary Clinton weighs him as a potential running mate. 

"Some have tried to single out these changes as politically motivated," Castro said in his opening remarks before the House Financial Services Committee. "They were not." 

That did little to de-escalate a three-hour hearing in which Republicans grilled Castro about the overhaul, which followed a high-profile push by liberal activists. At issue is a HUD program that sells distressed mortgages to financial firms, and the agency's sweeping moves this month to make the firms do more to help struggling homeowners. Among other things, the changes aim to make more loans available to nonprofit groups and offer homeowners an opportunity to reduce their principal amount.

The hearing Wednesday came as Clinton, the former secretary of state, is likely just days away from unveiling her vice presidential pick. She is expected to make the announcement not long after her Republican rival, Donald Trump, names his running mate.

Presidential politics hung over the hearing from the get-go, when Financial Services Committee Chairman Jeb Hensarling read excerpts from stories suggesting Castro made the changes to shore up his standing in Clinton's hunt for a running mate. "Mr. Secretary, these are clearly disturbing reports, to say the least," concluded Hensarling, a Dallas Republican.

Confronted again with the stories later in the hearing, Castro countered that HUD "cannot control the way that these things are covered. We're focused on good policy — good, sound policy." 

Castro had allies on the panel in Democrats such as ranking member Maxine Waters. In her opening remarks, the California lawmaker called the hearing an "attempt by Republicans to simply score political points by attacking the Obama administration while protecting the interests of the 1 percent."

"Obviously you're under attack," she told Castro, accusing Hensarling of not even letting Castro answer questions. 

Hensarling and other Republicans on the committee repeatedly questioned why Castro had appeared to rush through what they view as unnecessary changes. Hensarling said the changes seek to turn the Federal Housing Authority "into a social program designed to help special interest groups."

Republicans grilled Castro over a website,, that had urged him to overhaul the program, noting he "is widely seen as a rising political star and many people think he is destined for higher office in Washington."

Castro said the website did not influence his decision to make changes to the program and that he "never discussed that website with folks."

Republicans also pressed Castro to name the studies he consulted before ordering the overhaul, expressing little patience when he gave less-than-direct answers. 

At least one Republican on the committee suggested Wednesday that his impression of Castro had not changed since he last addressed the panel, when he was new on the job.

"Now it’s been some time, and I guess we’re still looking for specific answers, which apparently an hour into it, we’re not getting," Rep. Scott Garrett of New Jersey said.

Rep. Randy Neugebauer, R-Lubbock, suggested  that Castro was too reliant on staff as he answered questions. "Mr. Secretary, quite honestly, the buck stops with you," Neugebauer said.

One of the Democrats on the committee, Mike Capuano of Massachusetts, urged Castro to disregard his GOP critics. 

"You think that when you do the right thing, somebody on that side will say good job," Capuano told Castro. "Ain’t gonna happen. Not today. Not next week. So therefore, do the right thing."

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Politics 2016 elections Julián Castro