Cash-buyers in Seattle’s red-hot housing market are more often than not large investors whose first order of business is to hike up rents.

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DID you know that Wall Street speculators, just like those recently portrayed in the Oscar-nominated movie, “The Big Short,” are becoming major landlords across the country?

Nationally, hedge funds and private-equity firms have amassed 200,000 homes, while receiving special treatment from the government. Some 95 percent of delinquent Fannie Mae, Freddie Mac and U.S. Department of Housing and Urban Development (HUD) loans have gone to hedge funds, private-equity funds and Wall Street banks. These federal agencies won’t write-down the debt for homeowners, but they are writing it down for Wall Street speculators.

The speculators can then turn the properties into rentals — often bundling them into securities for investors, just like the bundling practice with mortgages that led to the housing crash. Rents are then increased and contribute to displacement of poor and working families — particularly African-American and Latino families.

Not only does this hurt communities, it could fuel another housing-market crash because this new form of mortgage-backed security, tied to single-family rentals, is a new asset class and has an untested capacity to manage thousands of new homes.

Seattle faces a serious affordable-housing crisis that is pushing out many long-time residents. The Journal of Urban Affairs found that, on average, an increase of $100 in median rent corresponded to a 15 percent increase in the numbers of people who are homeless.

With Mayor Ed Murray’s call for a state of emergency on homelessness, we need the federal government’s help. Fannie Mae, Freddie Mac and HUD can assist by selling any of these delinquent mortgages they have in Seattle and King County to nonprofits, which work to both prevent foreclosures and to create affordable housing.

We know that home-ownership in Seattle-area neighborhoods has changed dramatically, especially in particular neighborhoods. ZIP codes that were the hardest hit early in the crisis still are. In September, Zillow reported that in the Seattle metro area, 19.5 percent of the bottom-tier homes are still underwater — owing more than they are worth.

The continued loss of equity by homeowners in these neighborhoods is bad enough without another insidious angle of the crisis, revealed in a 2014 article in The Seattle Times by reporter Sanjay Bhatt: “Amid the region’s tightest housing supply in a decade, a Wall Street-backed company stormed into the Seattle metro area and bought, on average, 10 homes a day.”

Over the summer, I went to Washington, D.C., with Local Progress to support the national effort to get Fannie Mae, Freddie Mac and HUD to stop selling mortgages to Wall Street at a discount and help homeowners with principal reduction on their mortgages. Local Progress is a national network of progressive local legislators founded by my then-boss, former Seattle City Council member Nick Licata and San Francisco Supervisor John Avalos. We asked The Federal Housing Finance Agency Secretary Mel Watt and HUD to direct the Federal Housing Administration, Fannie Mae and Freddie Mac mortgage-foreclosure sales away from Wall Street speculators and to eligible nonprofits.

In January 2016, RealtyTrac reported that in the Seattle metro area the percentage of homebuyers paying cash rose to more than 31 percent. These cash-buyers are typically large investors who often don’t live in Seattle or have the same kind of stake in our city. The last thing we need is federal agencies selling our precious housing stock to hedge funds and private equity firms.

We have recently learned that between Fannie Mae and Freddie Mac, some 10,000 loans will be sold nationally over the next month. I’m joining with other elected officials and community groups on Thursday to ask Fannie Mae and Freddie Mac to tell us how many delinquent mortgages they have in our cities and where these loans are located. There is no reason to sell these bundled mortgages to Wall Street speculators when they could be working with us on viable alternatives.

There are a growing number of “community development financial institutions” that are buying these mortgages and modifying their terms with principal reduction. Sometimes rescuing the home from foreclosure isn’t possible. But even in those cases, shouldn’t property-disposition plans be about meeting the affordable housing needs of the community?

The choice is clear: Freddie and Fannie should join with cities to stabilize communities hit hardest by the housing crisis and sell these delinquent mortgages to nonprofits, not Wall Street speculators.