For the last several years, Julián Castro’s star rose further and further within the Democratic Party, dating back to his keynote speech at the 2012 Democratic National Convention, which launched the then-mayor of San Antonio onto the national stage as a potential heir to the Democratic throne.

Castro rose to even more prominence in the Democratic Party when he became the Secretary of the Department of Housing and Urban Development in July 2014.

Last year, Castro’s formal endorsement of former Secretary of State Hillary Clinton for President had many wondering if the HUD Secretary was not only on the shortlist as a potential nominee for Vice President under Clinton, but perhaps even at the top of that list.

In the time since Castro’s endorsement of Clinton, a serious challenger to Clinton’s presumed easy road to the Democratic nomination emerged in the form of Sen. Bernie Sanders, I-VT, who is now engaged in a fierce battle with Clinton to be the Democratic nominee.

Progressives on the far left appear to prefer Sanders populous message and his lack of ties to Wall Street, and now a battle for the soul of Democratic Party is being waged between Clinton and Sanders supporters.

And Julián Castro is about to get caught in the crossfire.

According to a report from Politico, a cadre of progressive groups are now targeting Castro in an attempt to disqualify him as Clinton’s nominee, and using HUD’s practice of selling non-performing loans to private investors as their weapon.

The groups are launching a website and a series of petitions that aims to use HUD’s sale of NPLs to Wall Street and Castro’s supposed reluctance to sell to non-profits instead as a way of turning him into a “toxic asset” for the Clinton campaign.

On Tuesday, the groups launched a website entitled “DontSellOurHomesToWallStreet.org,” which claims that two recent HUD NPL sales saw 98% of the delinquent mortgages sold “straight to Wall Street” instead of being sold to non-profit or community groups.

The groups, which include Presente, Rootstrikers, Color of Change, CPD Action, New York Communities for Change, the Alliance of Californians for Community Empowerment Action, American Family Voices, Courage Campaign, Daily Kos, Democracy for America, RootsAction, Other 98%, and the Working Families Party, call the practice of selling NPLs to private investors “Julian Castro’s Wall Street Giveaway.”

Those groups aren’t alone in calling the practice of selling NPLs to private investors into question.

Over the last several months, prominent figures in the federal government, like Sen. Elizabeth Warren, D-Mass., and Rep. Mike Capuano, D-Mass. loudly criticized the program, as did the U.S. Conference of Mayors and other groups, which argue that private investors push foreclosures over attempting to work to keep borrowers in their homes.

The progressive groups behind “DontSellOurHomesToWallStreet.org” appear to feel the same way.

“It’s a situation where the Clinton campaign wants Castro to be a major asset to her chances of winning the White House, and unless he changes his position related to foreclosures and loans, he’ll be a toxic asset to the Clinton campaign,” said Matt Nelson, the managing director for Presente.org told Politico.

The groups claim that “Wall Street bankers are back at it again,” and that HUD’s Distressed Asset Stabilization Program is nothing but a “giveaway” to Wall Street.

The groups say that in 2015, 98% of homes sold through HUD’s DASP program went straight to Wall Street (15,309 out of 15,624), and ask for Castro to “fundamentally fix” the program, changing it from a “Wall Street giveaway” into a mechanism to “stabilize struggling neighborhoods.”

HUD claims that the groups’ figures are incorrect and tout the success of the DASP program and how many people the program has helped.

“Providing an option for homeowners to remain in their homes is one of the reasons the DASP program was created,” a HUD spokesperson said via email.

“We’ve received feedback from stakeholders which has led us to make a number of important changes to the program including the creation of non-profit only pools and delaying foreclosure for a year,” the HUD spokesperson continued. “Additionally, we are still evaluating further enhancements to the program to meet our core mission.”

HUD states that since June 2014, nearly half of the resolved loans to date, or approximately 25,000 loans, have successfully avoided foreclosure and over 25,000 more remain in delinquent servicing. 

HUD notes that the DASP program adopted a new policy in June 2105, requiring that NPL investors delay foreclosures for a full year after purchasing the loans, rather than the 6 months that was previously required.

And considering that most of the NPLs sold are two and half years delinquent, the increased time “guarantees” borrowers sufficient time to try to resolve the delinquency while remaining in their home, HUD said.

HUD also notes that NPL buyers are now required to evaluate all borrowers or either a HAMP modification or a modification that is “substantially similar” as part of effort to keep borrowers in their homes.

HUD also said that it now sets aside exclusive pools of loans for sale to non-profits, as well as decreasing the size of the normal pools and selling them more often, which HUD states makes them more attractive to non-profits that may not be as well-capitalized as private investors.

The progressive groups, on the other hand, cite Castro’s “rising star” status as one of the main reasons he needs to use his position at HUD to address this issue.

“Secretary Castro is widely seen as a rising political star and many people think he is destined for higher office in Washington,” the groups’ website states.

“But first he needs to fulfill his mission as the leader of HUD and stabilize communities by refusing to sell our neighborhoods away to Wall Street for a discount,” the groups continue. “Sign the petition to demand that Secretary Castro immediately ceases HUD mortgage sales until he can ensure the loans will be sold to nonprofit and mission-driven organizations and qualified buyers meeting high standards, not just reckless Wall Street banks.”

(Image above courtesy of a katz / Shutterstock.com)