WASHINGTON -- Representative Patrick McHenry (R-NC) has written Rep. Barney Frank (D-Mass), Chairman of the House Financial Services, seeking a hearing on the issue of individuals and organizations allegedly using non-profits to manipulate real estate and other markets.
As an example of this possible manipulation, McHenry used the Center for Responsible Lending, an affiliate of the Durham, North Carolina based Self-Help Credit Union.
In October 2007, a wealthy hedge fund manager named John Paulson gave the CRL $15 million in part, McHenry suggested, to help the organization further its position in favor of allowing federal judges to restructure mortgage loans--a position the CRL has long held. Paulson stands to benefit if such a law were passed, McHenry wrote in his letter.
"In October, he gave $15 million to the Center For Responsible Lending, which has been leading the charge in lobbying for a law that would let bankruptcy judges restructure mortgage loans. By forcing servicers to accept lowered monthly payments, market values would likely fall even further, and Mr. Paulson would most definitely benefit financially."
Kathleen Day, a spokesman for the CRL denied there was anything untoward about the contribution and added that "every penny of the [Paulson] money is set to help people stay in their homes." She added that the group has employed a detailed process to find local housing assistance groups who can best use the money.