Yale Finds Itself on Both Sides of Employee’s Foreclosure Fight
Yale Finds Itself on Both Sides of Employee’s Fight for a Home
School has indirect investments in firms seeking foreclosure
Nationstar, Ocwen in funds held by university’s endowment
A photograph of Frank Douglass’s Victorian house — painted sage green with white trim — is displayed on a website about Yale University’s employee homebuyer program.
Now Douglass, a 63-year-old custodian, has fallen behind on his mortgage payments after two job-related injuries and is facing foreclosure by a servicing company in which Yale’s endowment is an indirect investor.
About 30 percent of Yale’s $25.6 billion endowment is targeted for investment in private equity. One of its fund managers, Fortress Investment Group LLC, owns more than half of Nationstar Mortgage Holdings Inc., which services Douglass’s mortgage. A hedge fund Yale invests in, Kingstown Capital Management, has a stake in another servicing company, Ocwen Financial Corp. Both mortgage firms have been investigated for unfair practices and ordered to provide relief to some homeowners. In Douglass’s case, a court-appointed mediator said Nationstar didn’t follow guidelines in denying a loan modification last year.
“Yale helped me buy my house, and now they’re investing in the company that’s trying to take my house from me,” said Douglass, who has worked for the Ivy League university for 27 years, starting out as a pot washer in one of the dining halls. “I just don’t get it.”
“Mortgage servicers play a big role in determining whether struggling families keep or lose their homes,” said Colon, who bought a house in 2002 with assistance from Yale’s homebuyer program. “In our fight to end preventable foreclosures, we will have to contend with the fact that Yale University, an institution that has promoted home ownership in New Haven for decades, is invested in some of the largest mortgage-servicing companies.”
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