| NEW YORK
NEW YORK Feb 13 Phil Angelides, the
former chairman of a federal commission set up to look into the
causes of the financial crisis, has stepped down from a group
seeking to turn a profit by investing in distressed mortgages.
Reuters reported a month ago that Angelides was heading a
firm called Mortgage Resolution Partners, which had touted its
political connections as part of its "secret formula" for
negotiating deals to buy distressed mortgages. (link.reuters.com/vyx56s)
Angelides' involvement with the firm had drawn scrutiny on
Capitol Hill, where one congressman recently sent a letter
warning about potential political influence peddling.
A representative for Angelides told Reuters on Monday the
former California state treasurer stepped down as executive
chairman of the upstart firm on Jan. 27. The representative did
not give any reason for the move.
In a fundraising letter sent earlier this year to
prospective investors, Mortgage Resolution Partners talked about
the political connections of Angelides and several other members
of the firm. The start-up was focused on buying distressed
mortgages in California and was seeking to raise about $6
million to study the feasibility of its plan.
In an emailed statement, the representative for Angelides
said the former chairman of the Financial Crisis Inquiry
Commission "has returned to his business and civic commitments."
Angelides, according to the statement, "continues to support
the mission of stemming the tidal wave of foreclosures and any
efforts, including those of MRP, which help homeowners."
Shortly after Reuters reported on Mortgage Resolution
Partners, an official with the House Oversight and Government
Reform Committee began seeking a copy of the fundraising letter,
a source familiar with the situation told Reuters.
On Feb. 10, Representative Patrick McHenry, chairman of a
House Oversight and Government Reform subcommittee on the
Troubled Asset Relief Program, sent a letter to Shaun Donovan,
the Obama administration's secretary of Housing and Urban
Development on the subject. McHenry asked him for details about
steps that are being taken to guard against "cronyism or
conflicts" in the recently announced $26 billion mortgage
settlement with the nation's biggest banks.
In the letter, McHenry, a Republican from North Carolina,
noted the investor letter sent by Mortgage Resolution Partners.
"It is essential that the distribution of Settlement funds
be free from the sort of political influence peddling that Mr.
Angelides and his colleagues are apparently planning," McHenry
wrote, giving Donovan until Feb. 24 to provide information about
steps being taken to make sure the settlement is "well managed."
A spokesman for McHenry said the subcommittee's request for
information has not changed even though Angelides is no longer
involved with Mortgage Resolution Partners.
Angelides had tried to follow the lead of other hedge funds,
private equity firms and other deep-pocketed investors, which
are looking to scoop up foreclosed homes and earn money by
renting them out. The Federal Housing Finance Agency recently
received proposals from hundreds of investment groups interested
in acquiring and renting out single-family homes federal
agencies have foreclosed on.
(Reporting By Matthew Goldstein and Jennifer Ablan; Editing by