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Capping off the Democratic National Convention and officially ushering in the election season, President Barack Obama took to the podium last night to lay out his vision for America’s future. And while there are points in his speech, as there were in his challenger’s, that paint an encouraging picture for Latinos of the next four years under his leadership, there is yet again one prominent omission—what about housing?

At last week’s Republican National Convention, there was hardly a whisper about how Gov. Mitt Romney planned to solve the housing crisis. Since the housing bubble burst, home values have plummeted, leaving millions of Americans paying off mortgages that are worth more than the actual houses they own. Couple that with the millions of families all across the country who have either already lost or face the very frightening possibility of losing their homes to foreclosure, and you have a very real problem that needs to be dealt with now. And while Gov. Romney and President Obama lay out their cases for how they plan to guide this country through the economic crisis to recovery, they seem comfortable leaving families in the dark about how they plan to stem the bleeding in the housing market.

To be fair, Democrats did turn the mic over to California Attorney General Kamala Harris, who highlighted one of the administration’s crowning housing achievements—the historic $25 billion Department of Justice settlement between five of the nation’s largest mortgage servicers and 49 state attorneys general. Perhaps we can take this as an indication that the incumbent plans to run on his record. Certainly, Obama has had victories worth mentioning—the historic Countrywide settlement as well as the opening of the Consumer Financial Protection Bureau both show that this administration is attempting to hold banks accountable for unfair lending practices and is working to prevent consumers from once again becoming victims of fraud.

Still, these are just a few of the building blocks necessary to create a stronger, safer housing market, and quite frankly, these blocks alone will not do the job. President Obama needs to lay out a plan for American homeowners explaining how he is going to turn this housing crisis around. Is housing counseling for struggling homeowners going to be funded or will it succumb to budget cuts? How does principal reduction factor into housing policy and is it even on the table? American homeowners don’t know because the two candidates running for office won’t talk about it.

Last night, the President acknowledged the uphill challenge of healing the economy: “When the house of cards collapsed in the Great Recession, millions of innocent Americans lost their jobs, their homes, their life savings, a tragedy from which we’re still fighting to recover.” But the eerie silence from both President Obama and Mitt Romney inspires more concern than confidence over their ability to muster enough political will to grapple with solutions. And what homeowners need more than anything is the confidence that the leader of this country is in their corner.

We need a commitment from both candidates that they will work to make homeownership viable for all Americans. We need a plan from both candidates for how they are going to stem foreclosures and protect American consumers from fraud. And most importantly, we need an acknowledgement that this problem exists and is worth talking about during this election.

This was first posted to the NCLR Blog.

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Comment Preferences

  •  Addressing the mortgage crisis... (1+ / 0-)
    Recommended by:
    HeyMikey

    ...has been a very "quiet room" discussion for Barrack Obama ever since the 2008 campaign, regrettably.

  •  Oh I just had a good chuckle (0+ / 0-)
    We need a commitment from both candidates that they will work to make homeownership viable for all Americans. We need a plan from both candidates for how they are going to stem foreclosures and protect American consumers from fraud.
    Romney's plan is that you get your parents to give you a house. Gee, that's what he did when he was starting out.  Isn't that what everyone does?

    Romney has already told us what he wants to do about foreclosures: nothing. Let the market hit bottom!

    Romney doesn't want to protect American consumers from fraud, they want to pull of the biggest con in the history of fraud on the American people.  He has promised to eliminate the Consumer Financial Protection Agency.

    Anyone who cares about any of these issues can't even consider voting for Romney.

    •  Romney also will get rid of the mortgage deduction (1+ / 0-)
      Recommended by:
      sjburnman

      which means we will simply walk away because then our house will not only be underwater but we will lose the tax break that allows us to pay higher property taxes even though our value has gone down... Watch millions walk away... worsening the housing crises... which means any business involved in housing will go down to so unemployment will rival the Depression which most of Rmoneys policies seem to be aimed at pushing us into... despite President Obamas best efforts with a opposition party that would rather see Americans suffer as long as the 1% gets richer..

      Under Rmoney the Bankers will be able to perpetrate even more fraudulant scams. Well we are not going to enrich the AHs any more.  

      How can you tell when Rmoney is lying? His lips are moving. Fear is the Mind Killer

      by boophus on Sat Sep 08, 2012 at 12:19:42 PM PDT

      [ Parent ]

  •  What solution do you want? (2+ / 0-)
    Recommended by:
    HeyMikey, FG

    Here is the problem:

    Do you want house prices to go up so that everybody who paid too much for a house in the last 20 years can recover their money

       --or--

    do you want house prices to go down so that we can "make homeownership viable for all Americans"

    •  That's quite the counterfactual Wall St. line... (0+ / 0-)

      ...when neither has to occur.

      What should be happening is that more homeowners should be receiving more money from the government, which should be much more aggressively pursuing banks. And, the banks, in turn, should be paying a hell of a lot more than a few billion bucks for a get-out-of-jail free card.

      "I always thought if you worked hard enough and tried hard enough, things would work out. I was wrong." --Katharine Graham

      by bobswern on Sat Sep 08, 2012 at 12:18:07 PM PDT

      [ Parent ]

      •  So you are on the "house prices go up" side (2+ / 0-)
        Recommended by:
        HeyMikey, FG

        House prices supported by the government is what you are arguing for.   If the government pays off everybody's loan then we are supporting the housing bubble of the last 20 years.   Good news for homeowners who bought recently, not such good news for buyers.  

        One can put the bankers in jail (they richly deserve it) whichever side you chose -- that is not material to the discussion.  

        I want people to think about this seriously.    What will probably happen is that house prices will go back up, but not to hyper-bubble levels and not in all places.    (This is beginning to happen now.)   We have an opportunity to do something different but it will not last long.   I do not know what "something different" entails and am looking for ideas.

        Making me pay for my neighbor's decision to buy an overpriced house  that is identical to mine is not terribly fair, and more importantly will not get significant political support.    (If he gets a $300,000 get out of debt free card, what about me?)

        •  A different approach. (0+ / 0-)

          You've put your finger on the dilemma. In any sane economy, falling house prices would be a good thing--just like falling car prices, falling smartphone prices, falling computer prices, falling food prices. Lower housing prices would mean fewer homeless people; ordinary people could afford nicer homes; more disposable income.

          The reason we've come to see rising house prices as good, of course, is that we've come to rely on housing as investment. Thus we've come to demand that government ensure ever-rising house values, including housing subsidies even for the middle class and rich.

          Which all adds up, almost inevitably, to a bubble.

          I'd like to see a Big Government Agency With A Lot Of Cash (BGAWALOC). When a homeowner is desperately underwater or just desperately behind on payments, the BGAWALOC would use eminent domain to buy the house at current market value. The government would then own the house. It would rent the house to the former homeowner at a rent  based on the homeowner's income (like a Section 8 voucher rent). If the homeowner someday qualifies for a mortgage, the homeowner can buy the house back for whatever a fair market value is at that time. If not, then if the homeowner ever moves out, the government can either rent the house out to somebody else, or sell it for whatever the market value is at that time.

          The reason this doesn't happen, I suspect, is that the banks are carrying a lot of houses on their books as assets, at grossly inflated values. If the banks had to sell the houses to the government at their true market values, the banks' balance sheets would take a giant hit. Then the banks would be exposed as undercapitalized, and we'd have to decide whether to bail the banks out--again.

          OTOH corporate cash-on-hand is at a 56-year high, with banks leading the way, so they could probably take a major hit on their housing assets and still be OK.

          I'd also end the mortgage interest deduction for all homes except a primary residence (no deductions for second homes), and even that deduction would be limited to the value of a modest home in an average-price city.

          "The true strength of our nation comes not from the might of our arms or the scale of our wealth, but from the enduring power of our ideals." - Barack Obama

          by HeyMikey on Sat Sep 08, 2012 at 02:03:29 PM PDT

          [ Parent ]

          •  Why a government agency buying the house is (0+ / 0-)

            better than short sale? I guess it is somewhat better than a foreclosure b/c people a house won't sit empty. Given that a lot of mortgages are owned by Fannie and Freddie who are in turn owned by the government, government can do it already without anyone buying anything.

            •  Better for several reasons. (0+ / 0-)

              The banks won't agree to a lot of short sales. With eminent domain, the bank wouldn't have a choice.

              And the problems with Fannie & Freddie are (1) the head of one or the other has his head way up his ass and won't do anything because he's a GOP ideologue, and (2) AFAIK Fannie & Freddie don't have authority to rent the house out, after they foreclose on it, for a rent based on the former owner's income. Which could be zero. So instead they put the vacant house on the market, driving the market even lower, disrupting the former occupants' lives, and housing nobody.

              "The true strength of our nation comes not from the might of our arms or the scale of our wealth, but from the enduring power of our ideals." - Barack Obama

              by HeyMikey on Sat Sep 08, 2012 at 08:00:33 PM PDT

              [ Parent ]

              •  The guy can be replaced. He's not a GOP (1+ / 0-)
                Recommended by:
                HeyMikey

                ideologue, just a bureaucrat. It's much easier to give them this authority than to create a new government agency to buy houses. Of course, neither is going to happen since Republicans will block everything.

                •  Not sure he can be replaced. (0+ / 0-)

                  More and more department heads have defined terms that carry over into future Presidencies. Maybe he could be. Krugman was calling for him to resign or be fired a few months ago.

                  But yeah, you're right, the GOP will kill anything worthwhile.

                  "The true strength of our nation comes not from the might of our arms or the scale of our wealth, but from the enduring power of our ideals." - Barack Obama

                  by HeyMikey on Sat Sep 08, 2012 at 09:48:44 PM PDT

                  [ Parent ]

                  •  He can easily be replaced. You are probably (0+ / 0-)

                    thinking about members of various commissions. He's an acting appointee. President nominated a permanent replacement either in 2010 or in 2011 but Senate Rs killed the nomination. He can recess appoint smb if he wants to.

                    •  I don't think so. (0+ / 0-)

                      Pretty sure the guy I'm thinking of is a Dubya holdover.

                      I think you're thinking of Freddie and I'm thinking of Fannie, or vice versa.

                      "The true strength of our nation comes not from the might of our arms or the scale of our wealth, but from the enduring power of our ideals." - Barack Obama

                      by HeyMikey on Sun Sep 09, 2012 at 08:14:33 PM PDT

                      [ Parent ]

                      •  I'm thinking about this: (0+ / 0-)

                        http://www.fhfa.gov/

                        It runs both Fannie and Freddie. The guy in charge is Edward DeMarco.

                        http://blogs.wsj.com/...

                        •  Hmm. Thanks, but... (1+ / 0-)
                          Recommended by:
                          FG

                          Thanks for pointing out the guy in question, and that he oversees both Fannie and Freddie. But from your WSJ link:

                          Can Mr. Obama fire Mr. DeMarco?

                          Without the Senate confirming a new nominee,

                          [which obviously ain't gonna happen]
                          there are probably two options.

                          First, he could ask Mr. DeMarco to take another job in the government and then name a new acting director. But he can’t pick just anyone. The law establishing the FHFA says that the acting director must be chosen from three of the deputy director positions at FHFA. (The relevant part of the statute is on page 10).

                          Others have argued in favor of Mr. Obama nominating someone for the job and then installing that person via a recess appointment. The White House did that for Richard Cordray, who heads the Consumer Finance Protection Bureau.

                          But it’s not clear whether White House lawyers would sign off on such a move.

                          So it looks like Obama could offer DeMarco another government job, and if DeMarco says no thanks, then Obama could be stuck.

                          I am aware of the WSJ's bias, so this might not be the whole story. But I'm unaware of the rest, if there is any.

                          "The true strength of our nation comes not from the might of our arms or the scale of our wealth, but from the enduring power of our ideals." - Barack Obama

                          by HeyMikey on Mon Sep 10, 2012 at 11:24:14 AM PDT

                          [ Parent ]

                          •  Elsewhere (e.g. WaPo) there were articles (1+ / 0-)
                            Recommended by:
                            HeyMikey

                            saying that recess appointment is probably the only realistic way to replace the guy. He can't say no to that. There are some complications with it as WSJ is saying but it's very much doable.

                          •  Thanks! Then his ass should be OUT! NT (0+ / 0-)

                            "The true strength of our nation comes not from the might of our arms or the scale of our wealth, but from the enduring power of our ideals." - Barack Obama

                            by HeyMikey on Mon Sep 10, 2012 at 01:19:08 PM PDT

                            [ Parent ]

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