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Romney’s Housing Plan: Still Elusive

Romney’s Housing Plan: Still Elusive

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David Abromowitz provides a sampling of positions on housing that Gov. Romney appears to hold based on remarks he or his surrogates have made during the campaign.
David Abromowitz provides a sampling of positions on housing that Gov. Romney appears to hold based on remarks he or his surrogates have made during the campaign.

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Published by: Center for American Progress on Aug 31, 2012
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| Romney’s Housing Plan: Still Elusive
Romney’s Housing Plan: Still Elusive
Five Years into the Foreclosure Crisis, RepublicanPresidential Candidate Hasn’t Produced Any Proposals
David Abromowitz September 2012
I has now been ve years since nancial markes seized up and he housing marke col-lapsed ino a prolonged oreclosure crisis aecing millions o American households.
  As a CAP issue brie eniled “I’s ime o alk Abou Housing” recenly underscored,he housing crisis cries ou or higher prioriy in he presidenial race, as he homeown-ership and renal markes remain in dicul shape, drag down he economy, and impacmillions o households on a daily basis.Te auhors noed:
 As o March 2012, banks and other fnancial institutions had completed approxi-mately 3.5 million oreclosures since the fnancial crisis began in September 2008,with another 1.4 million loans still in the oreclosure process. Tat month Wall Street analysts predicted as many as 7.4 million to 9.3 million at-risk borrowers were yet to ace oreclosure or liquidation.
Naurally we would expec ha a presidenial candidae basing his campaign on businessacumen would have a deailed se o proposals o x he housing marke. Afer all, one o his chie economic advisors has recognized ha in order o urn around he bad economy,“he bigges bang or he buck lies in housing, he epicener o he nancial crisis.”
Bu Mit Romney’s housing policy is elusive: We may see his ax reurns beore we know  where he sands on he housing issues acing so many middle-class Americans. I you goo he Romney campaign websie, you will no nd any saemens on housing policy spelled ou. And you cerainly did no hear a plan in eiher Gov. Romney’s or Rep.Ryans accepance speeches a he Republican nominaing convenion, wih barely amenion ha here even is a housing challenge.Insead, below is a sampling o posiions on housing ha Gov. Romney appears o hold based on remarks he or his surrogaes have made during he campaign. Wih his choiceo Rep. Paul Ryan (R-WI) as his running mae, we also assume ha he Romney cam-
| Romney’s Housing Plan: Still Elusive
paign believes in he posiions se ou in he deailed “Pah o Prosperiy” blueprin orhe Ryan budge ha Budge Commitee Chairman Ryan released.
Let foreclosures continue
I you believe ha he marke is always righ, hen you would believe ha “he marke”should be lef alone o evenually deal wih oreclosures. Cerainly ha is where Gov.Romney sared las Ocober when he old
 Las Vegas Review Journal
’s ediorial board ha he oreclosure crisis jus had o “run is course and hi he botom.
 By he ime he go o Florida in January, however, he had backed away rom he pureree marke approach: “Te idea ha somehow [he housing marke] is going o cureisel all by isel is probably no real. Tere’s probably going o have o be a much moreconcered eor o work wih he lending insiuions and help hem ake acion whichis in heir bes ineres and in he bes ineres o he homeowners.
Bu hen in Nevada no much laer, he had his exchange wih FoxV abou homeown-ers acing oreclosure:FOX5 asked, “I you’re presiden, can hey expec he ederal governmen o help hemsave heir home, or are hey on heir own?”“My view is ha he bes hing ha he ederal governmen can do o help is o gehis economy growing again, o have good jobs wih raising incomes,” Gov. Romney responded. “I people are looking or someone o promise ha hey’ll wrie hem a check,ha he governmen will give hem money, hey should voe or Presiden Obama.””
Te remark is conusing because i suggess Gov. Romney does no see he criical link  beween he economic disrupions o oreclosures, he weak housing marke, and heslow economic recovery ha many economiss—including conservaive policy advisorso pas Republican presidens—have repeaedly noed.Marin Feldsein, who chaired Presiden Ronald Reagan’s Council o Economic Advisers, is one leading example. He has saed, “Te all in house prices is no jus adecline in wealh bu a decline ha depresses consumer spending, making he economy  weaker and he loss o jobs much greaer. We all have a sake in prevening ha.
 Moreover, wha would Gov. Romney acually do as a “concered eor” o help home-owners, especially i he means ha no governmen unds are involved? Answers arecompleely missing rom any deailed plans rom his campaign.
| Romney’s Housing Plan: Still Elusive
 And since he or his surrogaes have criicized every Obama adminisraion eor—help or underwaer borrowers who have made heir paymens, help or homeowners who wan o renance bu can’, giving homeowners he same righs in bankrupcy oresrucure morgages ha landlords have, and many more—i is hard o expec any-hing more rom Gov. Romney han he ype o purely volunary urging o lenders o“do more” ha characerized he Bush adminisraion’s hands-o approach a he begin-ning o he oreclosure crisis.
No help for homeowner refinancing
One o he more curious omissions rom a Romney housing plan is an embrace o a large-scale renancing proposal pu orward by a key Romney economic advisor, Glen Hubbard.Hubbard, a ormer Bush adminisraion economic advisor and now dean o heColumbia Business School, has since 2008 been advocaing leting he average American household renance is morgage a low ineres raes as a way o help con-sumers deleverage and enjoy he economic boos rom lowered monhly paymens.Hubbard has esimaed ha allowing borrowers o renance a 4 percen raes wouldsave he average homeowner abou $400 per monh and could pump as much as $70 billion in purchasing power ino he pockebooks o consumers.
He even said ha heObama adminisraions revised HARP plan in Ocober 2011, which was designed oaccelerae renancing, “looks like a good plan.
 Wih numbers so compelling, wouldn’ Gov. Romney see Hubbards proposal as bohatracive and poliically sae given he proponen’s credenials? Apparenly no. A onepoin he old he
 Las Vega Review-Journal
ediorial board ha renancing plans are “worhurher consideraion, bu I’m no signing on unil I nd ou who’s going o pay and who’sgoing o ge bailed ou and ha’s no somehing which we know all he answers o ye.
  As recenly as Augus 6,
Te Wall Street Journal
asked his campaign, “[Does] Mr.Romney suppor eiher he Boxer-Menendez bill or he Merkley bill—or any o heoher renancing iniiaives pu orward by Mr. Hubbard?” Tey received his non-response: “A campaign ocial old Developmens ha Mr. Romney believes he besapproach or he housing marke is o engineer a robus economic recovery.”
Underwater homeowners should tread water on their own
Responsible principal reducion is a deb reducion approach ha many have advocaedo help he roughly 11 million amilies who are making heir loan paymens bu owemore han heir house is worh due o he general plunge in house prices.
I involves

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