Edwards To Divest Holdings Linked to Katrina Foreclosures

By MIKE GLOVER=
Associated Press Writer=
DES MOINES, Iowa (AP) -- Democratic presidential candidate John
Edwards, who has called homeownership "the foundation of the
American dream," said Friday he will divest his holdings in funds
linked to lenders that have foreclosed on Hurricane Katrina
victims.
"I will not have my family's money involved in these firms that
are foreclosing on people in New Orleans," he told the Associated
Press.
Edwards has reported $29.5 million in assets, millions of which
are invested in the hedge fund Fortress Investment Group., a
company that paid him nearly half a million dollars last year for
consulting advice.
Fortress has investments in lenders that offer subprime
mortgages, higher priced loans for borrowers considered greater
risks. The Wall Street Journal on Friday identified 34 New Orleans
homeowners who face foreclosure actions from lenders connected to
Fortress.
"My reaction is I'm going to help these people," Edwards said
in a telephone interview. "I just learned about this. I don't know
the details, I will find out and I will find a way to help them."
Edwards has decried the predatory lending practices that
sometimes accompany subprime mortgage lending, which especially
target minorities and the elderly, and can tie people to home loans
that they can't repay. He has built his campaign on an anti-poverty
message and has toured and worked in the neighborhoods devastated
by the 2005 hurricane. In fact, a three-day poverty tour he
embarked on last month began in New Orleans' hardest hit Lower
Ninth Ward.
Edwards worked part-time for Fortress Investment Group, getting
paid $479,512. He and his wife also had $2.7 million to $8.5
million invested in a Fortress subsidiaries, according to ranges
listed in his personal financial report. And Fortress executives
have donated generously to his presidential campaign -- company
employees have donated more than $150,000 toward his candidacy
during the first six months of the year.
Asked Friday if his investments damaged his image as a poverty
fighter, Edward's said: "No. Everyone knows I am completely
committed to eliminating poverty in this country. I have the
strongest national predatory lending proposal. These are things I
will pursue."
Edwards has proposed passing federal laws to prohibit mortgage
abuses and help homeowners at risk of foreclosure or bankruptcy.
Among its investments, Fortress has for some time owned a stake
in Green Tree Servicing, a company that specializes in managing
higher-priced mortgages for people with tarnished credit or low
incomes who are considered greater risks. As home-mortgage
delinquencies and foreclosures have surged in recent months,
especially for subprime loans, the distress has roiled financial
markets and sparked anxiety that it could spill over into the
broader economy.
Green Tree and a second subprime lender acquired by Fortress,
Nationstar Mortgage, were the two lenders filing foreclosure suits
in New Orleans, the Journal reported.

Associated Press Writer Jim Kuhnhenn in Washington contributed
to this report.

(Copyright 2007 by The Associated Press. All Rights Reserved.)
APTV-08-17-07 1321EDT