Time for GOP Candidates, and Obama, to Step Up on Housing Policy
The Republican front-runners and President Obama should break their silence in favor of all American home owners.
By Gavin Mathis - Houselogic
Palm Coast, FL –January 13, 2012 – The Republican front-runners and President Obama have been quiet on housing policy. They should break their silence in favor of all American home owners.
If you've been paying attention to the Republican presidential candidates lately, you wouldn't guess that housing is one the most important issues on voters' minds. Mitt Romney, Rick Santorum, and Newt Gingrich - the top three finishers in most national polls - have been almost silent on the issue. Instead, the leading Republican contenders have been narrowly focused on attacking President Barack Obama's jobs record.
Almost one in four homes are underwater, efforts to rejuvenate the housing market have fallen flat, and yet the candidates remain hesitant to challenge Obama, who also could do more to invigorate the housing market. That's because none of the GOP candidates want to appear to be endorsing large-scale government bailouts of the housing market for fear of alienating the conservative base.
"The housing crisis is the No. 1 issue facing the economy," Republican strategist John Feehery told The Washington Post. "But because the problem is so complex and the solutions are so expensive and so hard to explain, nobody wants to talk about it."
Back in October, Romney infamously told the Las Vegas Review-Journal editorial board that the housing market should be allowed to "hit the bottom" before the market could correct itself. In his 59-point plan for rejuvenating the economy, housing only receives fleeting references. One of Romney's top economic advisers, R. Glenn Hubbard, proposed a plan to encourage wide-scale refinancing efforts, but Romney hasn't endorsed it yet.
Santorum has been pretty quiet on the subject. During the Oct. 18 debate in Las Vegas, Santorum struggled to find words when pressed about the housing market. He said, "Yeah, I mean, it's - it's a situation right now where obviously the market is in - has been decimated. And so now you're looking at, how do you repair it? The problem is - in the first place, is that several people up here, the, quote, 'businesspeople,' supported the TARP, supported the bailout … I mean, look at what's going on here."
Suddenly finding himself atop many polls in early December, Newt Gingrich scrambled to put together a remedy for the housing market. He reportedly met with advisers and industry experts to come up with a series of proposals. If a consensus was reached, Gingrich is evidently keeping the plans to himself.
No fan of government intervention, Ron Paul has expressed support for eliminating the Department of Housing and Urban Development in the past. In 2002, Paul introduced the Free Market Housing Enhancement Act, which would have repealed privileges given to Fannie Mae and Freddie Mac designed to encourage home ownership. Given these past positions, it shouldn't be too difficult to guess that the government would have a much more limited role in the housing market under a Paul presidency.
Jon Huntsman, the third-place finisher in Tuesday's New Hampshire primary, has been the most vocal of the candidates on the issue, but even he has only offered vague statements regarding the government's need to limit its role in the housing market. On his campaign website, Huntsman merely lists eliminating Fannie Mae and Freddie Mac as a way to achieve a stable housing market. Also, his tax plan calls for the elimination of all deductions, even the enormously helpful mortgage interest deduction.
Aside from expanding the Home Affordable Refinance Program, President Obama hasn't offered many solutions either. The president must be assuming that attacking the intransigent Congress is his best bet for re-election. If the election turns out to be a referendum on the president's policies, he'll have just as much explaining to do as the Republican candidates come next fall, which is never a good thing for a sitting president. As the old political adage goes, "If you're explaining, you're losing."
If a Republican recaptures the White House next fall, he'll have to hit the ground running - and housing will need to be at the top of his agenda. It's time for the Republican candidates and President Obama to set aside election-year jockeying and put American home owners first.
1--Raise the limit for "conforming" mortgages from $417,000 to a more realistic figure. Up here in the Northeast (and in several other parts of the country) a JUMBO mortgage is required for non-luxury purchases. This type of mortgage usually has a 1% greater rate and can be more difficult to obtain
2--Allow a one-time (or more) ability to take a distribution from a retirement account (401k, IRA etc...) to pay down mortgage debt WITHOUT 10% PENALTY (perhaps even without claiming as income). This would allow many to re-finance homes at the present low rates that may not qualify for LTV reasons or even paydown Jumbo mortgages to allow refinancing at conforming rates.
Posted by Charlie D