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Jim Cole / AP
Republican presidential candidates, from left, former Utah Gov. Jon Huntsman, Rep. Michele Bachmann, R-Minn., Texas Gov. Rick Perry, businessman Herman Cain, former Massachusetts Gov. Mitt Romney, Rep. Ron Paul, R-Texas, former House Speaker Newt Gingrich and former Pennsylvania Sen. Rick Santorum are seen at the debate at Dartmouth College on Tuesday, Oct. 11, 2011, in Hanover, N.H.
By Anjeanette Damon (contact) 
Monday, Oct. 17, 2011 | 2:01 a.m.
Sun coverage
When the Republican presidential field debated economic policy in New Hampshire last week, the word “foreclosure” was uttered once. One time.
And that lone mention by former Utah Gov. Jon Huntsman accompanied no prescription for the crisis that has reached epidemic proportions in Nevada and that economists agree is among the biggest drags on the economy. Rather, Huntsman mentioned it in a description of the pain felt by Americans.
That’s unlikely to change when the GOP presidential candidates debate Tuesday in Las Vegas, a city ravaged by the bursting of the housing bubble. Republicans running for president have referred to foreclosures as an ugly symptom of the economic recession but offered no remedy.
Nevada leads the nation in the rate of foreclosures, with nearly 60,000 foreclosed homes glutting the market, further depressing home values and scarring neighborhoods. Last month, one in every 118 homes received a foreclosure notice, according to RealtyTrac. The owners of thousands more homes — 60 percent of the state’s homeowners — are so underwater on their mortgages that their houses may never again be worth what they owe.
“You’re definitely in a league all your own,” said Mark Calabria, a fellow at the Cato Institute, a libertarian think tank, who specializes in financial and real estate market public policy. “It’s a unique situation.”
While Nevada’s suffering is at the extreme, Federal Reserve Chairman Ben Bernanke warned Congress this month that the nation’s economic recovery may depend on a “clear path to a new housing finance system.” Underwater homeowners are “poorer, and less willing to spend,” he told the Joint Economic Committee.
Yet the presidential contenders have been reticent to take on the issue.
Former Massachusetts Gov. Mitt Romney uses the word “foreclosure” once in his 160-page economic plan. He addressed the housing industry just briefly in a single paragraph calling for the repeal and reworking of the Dodd-Frank Act, which reformed financial industry regulations in the wake of the 2007 collapse.
Romney doesn’t appear to have much competition when it comes to creative ideas for dealing with the foreclosure crisis.
If his opponents address it at all on their websites or in their rhetoric, it’s to join the GOP chorus for eliminating or reworking Dodd-Frank — a move that conservative and liberal economists agree may be necessary but would do little to address the existing foreclosure problem.
Huntsman’s economic plan calls for privatizing Fannie Mae and Freddie Mac and letting “the housing market settle in order to see sustainable growth.”
U.S. Rep. Michele Bachmann, R-Minn., urges the “repeal of the jobs and housing destruction act, also known as Dodd-Frank.” Former U.S. Rep. Newt Gingrich also urges the law’s repeal.
Herman Cain, Texas Gov. Rick Perry and former U.S. Sen. Rick Santorum so far have no formal policy statements on housing.
And libertarian-minded U.S. Rep. Ron Paul, R-Texas, advocates a completely hands-off approach.
“He was the only presidential candidate who predicted that federal intervention would lead to the housing bubble and subsequent crisis,” said Paul’s spokesman Gary Howard. “Dr. Paul believes that the only way a correction can occur is if the surplus housing is cleared from the market, and the federal government stops trying to prop up artificially high home prices.”
Some economists agree with the free-market approach, even as they acknowledge it may seem like a heartless way of dealing with the crisis.
“You really can’t fight the fundamentals of supply and demand,” Calabria said. “How do you move vacant and half-built homes? To me, the only solution is let prices get to the level (where) these things start to look attractive.”
Calabria argued against loan modification programs, even those that would address underwater homeowners.
“That wealth is gone,” he said. “If you take a dollar from the lender or a dollar from the taxpayer and give it to the borrower, it does not create wealth. It just redistributes it.”
Further government intervention just prolongs the inevitable slide of housing prices to a market-determined level.
But other housing experts argue the foreclosure crisis is so severe that it brings other dangerous problems, such as blight, crime spikes and further loss of wealth for those being responsible with their payments.
“The cost of letting natural forces take place is enormous,” said Nasser Daneshvary, director of the Lied Institute for Real Estate Studies at UNLV.
“Yes, the market ultimately will clean it up, but it might take 10 years. Meanwhile, prices keep declining, even healthy, no-default house values will keep going down. On foreclosures, people don’t take care of the property. We are causing waste for the entire economy.”
The Obama administration’s approach to addressing the foreclosure crisis has been to offer a variety of deferments, moratoriums and loan modifications. Daneshvary said those policies have done little to address the more fundamental problem — particularly in Nevada — of underwater homes.
Nationally, 70 percent of the 2 million loan modifications in the past two years have ultimately gone to foreclosure, Daneshvary said. Only 4 percent of those modifications addressed principal balances.
A principal reduction program, in which both the owner and the lender share in any appreciation above the marked-down price, could stem foreclosures, Daneshvary said.
Economists on both sides of the political divide agree that a simple repeal of Dodd-Frank would fail to address the foreclosure crisis.
Bachmann, Gingrich and others believe the regulations have made it more difficult for new homebuyers to obtain mortgages, preventing them from stabilizing the market.
That may be one factor, Calabria said. But regulations like Dodd-Frank are acting as a broader drag on recovery, he said.
“It doesn’t have much to do with the foreclosure and housing situation of today,” Calabria said.
UNR economist Elliott Parker agreed: “Any time you establish a set of regulations there are unintended consequences. There may be banks that who can’t lend now or some people who can’t get loans. But to offer that as a solution is pretty empty and it completely ignores the magnitude of the problem that we have today.”
The magnitude of the problem — coupled with the fact it is a politically risky area — may be holding policymakers back from addressing it in a forthright way.
“To really fix the problem, not just for the marginal people (close to default), but for everybody, it’s an enormous amount of money,” Parker said. “But the way we are doing it now is almost like giving people incentives to get in trouble.”
Others described the foreclosure crisis as a no-win situation for Republican candidates, leading them to avoid the issue altogether.
“To deal with this, some people have to lose,” Daneshvary said. “The financial sector benefited tremendously on the upswing and will end up losing anyway, but politicians don’t want to force them to take some losses.”
On the other side, the electorate is tired of bailouts, Calabria said.
“It’s bailout fatigue,” Calabria said. “Why am I bailing out the banks? Why am I bailing out the guy next door that bought more house than he can afford? That type of anger is felt across the board, but much more strongly felt across Republican circles.”
And then there’s the weariness factor.
“People are just tired of dealing with it,” former Assembly Speaker Barbara Buckley, D-Las Vegas, said. “Nobody is talking about it. But the longer this crisis goes on, the more time we’re not recovering. And it affects everybody. We really don’t need another house that is empty in Las Vegas.”
I was a bit taken aback when I read this:
"And libertarian-minded U.S. Rep. Ron Paul, R-Texas, advocates a completely hands-off approach."
Paul WARNED about an inevitable housing crisis as a result of Federal Reserve policy BEFORE it happened:
http://www.youtube.com/watch?v=mnuoHx9BI...
This corrupt financial system caused it, with the help of the Federal Reserve. The media was calling Ron Paul CRAZY when he was talking about this before the bubble burst. All of this is VERY predictable.
The Republicans aren't talking about ANYTHING that deals with the problems of the Country. Most of their time is spent bashing Obama and the other Republican candidates. Herman Cain is up in the ranks now because he actually has a plan, a strange one, but a plan nonetheless. The others.....????
Why is Bachman still hanging in there??
Foreclosures? Republicans don't need to talk about no stinkin' foreclosures when they have tax cuts for millionaires and billionaires and other red meat issues to fire up teabaggers.
GOP candidates know how to Keep It Simple, Stupid for their simple minded base.
The entire Republican debate has been a series of out of body experiences. What planet are they from? Are they paying attention to the global economy and the world''s reaction to the problems surrounding them? The United States may have started it all, but citizens are starting to shout rather than speak.
More capitalism is really going to hep here, did ya notice, Republicans?
Ignorance on display. Enough to make a person crazy.
I am really interested in what the Democrats have to say.
Are they on the same, "Let them eat cake" planet as the Republicans?? Some days I can't bear to hear it.
I think you're forgetting someone. he has been talking about it for 30 years, everyone laughed at him.
http://www.youtube.com/watch?v=uc0T1kMc1...
Actually Ron Paul was talking about the Housing Crisis nearly 5 years before it happened. You were warned. Then Democrats proceeded to cheerlead for years touting "green shoots" and economic data that simply didn't exist.
The housing bubble is over with, people got robbed. Not one person was prosecuted. That will never change.
Here was your warning.
http://www.youtube.com/watch?v=mnuoHx9BI...
Here is the RED FLAG!
http://www.youtube.com/watch?v=kNqQx7sjo...
It's because the network tools... err moderators, only ask them what they are told to ask.
I'm not sure the Republicans are alone in this. It seems the dems want to raise taxes to pay for failed policies that were supposed to keep unemployment below 8%. The last I checked unemployment is over 9% with more layoffs being announced. Does anyone think the country is going in the right direction?
The loan modification program hasn't worked either; clearly all the smart people in Washington don't have a clue as to what to do. I'm afraid it's going to get worse before it gets better.
Everyone ought to look at Casino Kid's You Tube URL. And everyone ought to understand that the good intentions expressed in it were just one leg of our current problems. Another leg was not understanding that lack of oversight could and would lead to excess. And the third leg of our current problems was that there were, and are, fundamental changes in the foundations of our economy that have been occurring for some time, changes such as the aging of the Boomers, followed by two smaller generations, and changes in business management and financial analysis, that would essentially reduce demand for housing of the kind we were building and buying, and shift overseas the ability to pay for "the American Dream". So, to make a long story short, we ended up with oversupply and underdemand -- by a combination of well-meaning government policies and unchecked private greed -- and both the Rs and the Ds enabled and fostered this.
Of course they won't talk about the housing crisis. Mainly because everything they stand for will end up making it worse or causing an even more catastrophic one later.
The Republicans during those debates go for safer areas like attacking President Obama and his entire administration constantly and relentlessly. And that's fine. Because that's all they are good at...complaining. In the Republican Party field of dreams nowadays, it's far easier to slap a donkey than it is to move an elephant.
How dare people talk about problems? The loud voices in their heads that tell them how awesome they are help drown out everything else. They only march to their own drumbeats. A good example of that is the laser sharp focus Mr. Cain has on his Plan 999 From Outer Space. He blathers about his economically unachievable cure all non-stop. Most economics have blasted it apart as nonsense. But Mr. Cain continues and will even say it helps indigestion cases if he can get away with it.
We'll see more of their idiocy. And soon. Because the Republican Party is no longer a shadow of its former self. They have went extreme right wing. The days of moderate Republicanism is over with. The Tea Party, of every faction, have all went down on record that THEY will choose the candidate for President, not the Republicans. Add to the mix that the Republicans are so incredibly mystified about this takeover which drowns out reason, they completely lock up and cannot make decisions anymore. I have seen instances where Fox News, Rush Limbaugh, Sean Hannity and other neo-conservative nutballs actually direct their policies and even perform think tank efforts for them.
It's all incredibly stupid. Even the debates are yawners because you know what stupidity they will say...even before they say it.
Even more amazing is how they have gone out of their way to make fun of and try to marginalize the Occupy Wall Street movement. My God, don't they understand they are ridiculing an overwhelming majority of Americans who are screaming enough is enough?!? And they want votes later? Don't make sense to vote Republicans into power who will just create more of the same ole same ole situation that caused the people to rise up and take it to the streets and protest even more. It's like a cycle that will never end, but only contribute to more destitution, misery, unnecessary sacrifice, joblessness and economic woes that will reach even more plummeting depths.
I still say the best thing to do is give them a wake up call at the 2012 elections. Vote ALL them idiots out of power. Because all indications show they are the root of the problems, not anywhere close to solutions. They need to sit on the sidelines for quite awhile.
"Calabria argued against loan modification programs, even those that would address underwater homeowners. "That wealth is gone," he said. "If you take a dollar from the lender or a dollar from the taxpayer and give it to the borrower, it does not create wealth. It just redistributes it."
Damon -- maybe foreclosures aren't mentioned in the debates because the question isn't being asked. And Rep. Paul has mentioned it in his recent interview by Jon Stewart --
"The regulators got bailed out, the middle class lose their jobs and their houses. All this desire to trust in the government to make sure that big corporations won't hurt them actually is a backfire on them."
Like most you only scratch the surface of this foreclosure crisis. LOANMODLOANMODLOANMOD is like a bad mantra shouting down the question of how can "lenders" who don't actually own the loans lawfully modify anything? You assume just because the banks and their many parasites push papers at homeowners saying essentially "pay us or we'll put you out" they are actually owed. Yet when pushed to prove it, even by a court, they fight hard to have that fact ignored. Our Supreme Court's recent Pasillas and Leyva decisions smacked that one down.
"Why don't the banks want us to see the paperwork on all these mortgages? Because the documents represent a death sentence for them..... in America, it's far more shameful to owe money than it is to steal it." -- an article from the November 25, 2010 issue of Rolling Stone by Matt Taibbi "Courts Helping Banks Screw Over Homeowners"
No one has addressed the issue. The majority of the owners who are upside down are not Fannie May or Freddie MAC. Someone needs to come up with a plan that will allow owners who are current and have no equity to refi. A lot of talk but no action, just lip service. Both parties are fault and if there is no action, I plan on not voting for anyone who holds office today even if they are running against Mickey Mouse. Both parties need to work together to resolve this issue and other issues which effect our country.
Obama does not have a solution.
Loan Mod, Loan Mod, Loan Mod. Give it a rest. That's no solution to the problem. How do you solve the problem IF all these banks have the actual required paperwork? All KillerB does is look for an excuse not to pay your responsilities.
Reprehensible. The question is did you borrow the money? Just about every loan in this country(business, car, personal) probably might fall under a paperwork issue. Still doesn't escape the fact that someone borrowed money and it needs to be paid back. Might as well fold the entire economic system under this premise that you don't have to pay your mortgage because there's a missing middle initial on the paperwork. Your comments are insignificant.
GOP candidates don't talk about housing issues because they all feel it's the buyers fault they are upside down.........and it takes away from the all important abortion issues.
Since the GOP has taken the house, not one jobs bill yet, but they have had votes on seven abortion bills!!!!
The solutions passed by government have not and will not work. We already know that government programs to keep underwater homeowners (who have no business owning the property in the first place) from losing a home only prolongs the housing crises by artificially elevating housing prices. Did you hear that dipstick williams?
We need to work the laws of supply and demand.
A faster way to help resolve the crises may be for the state and or federal government to pass a law that would reduce home prices 20%+ to help spur demand on Freddie and Fannie homes. This is what a store does when it has excess inventory. The fed would then be better off reimbursing the homeowners for the difference. It's certainly better than prolonging things.
Or naturally you have to give this crises time to resolve like anything else. Like in Japan and historically speaking.
Bertsos
"Since the GOP has taken the house, not one jobs bill yet, but they have had votes on seven abortion bills!!!!"
And just how many budgets have the Senate Dems provided in the last two years?
The solution is simple. If you can't afford your house, short sell it. If you can't, let it be foreclosed and declare bankruptcy. See a lawyer before you go into default and see what your options are. The short sale may cover the lawyer fees. You can't just walk away from a loan issued before 2009 in LV.
If you have equity and a job, you might be able to refinance. If you don't have a job, I feel for you, but lowering your interest rate isn't going to help you afford a home without an income. If you don't have equity now, you aren't likely to have any for many, many years. Why would you want to keep putting money into a home that isn't going to be worth anything to you for possibly decades? You might as well rent and not have to worry about maintenance. It'll be a long time before there are abundant jobs in LV again. Not "owning" lets you move to where there are jobs.
The only part of Obama's mortgage plan that makes sense to me is paying people a $2-3000 to move out without trashing the home and thereby giving them some cash to pay deposits on a rental (this assumes they have an income for rent but too low to afford the home).
So really, what is there for the Republicans to talk about? The lenders have to follow the law when foreclosing and the market needs to handle the inventory. I've been forced to sell houses before when I got laid off and had to pony up thousands. There were no government programs back then. It sucked then, it must suck now, but rearranging deck chairs on the Titanic isn't helping anyone.
The US is run by rich people.
The solution? Get rid of the rich people.
"How do you solve the problem IF all these banks have the actual required paperwork?"
TomD -- IF they do then there's no problem for them. But they don't, even the big federal regulator nailed the biggest banks on that last April, review their consent orders @ http://www.occ.gov/news-issuances/news-r....
"...I sincerely believe, with you, that banking establishments are more dangerous than standing armies; and that principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale." -- Thomas Jefferson in his May 28, 1816, letter to John Taylor
Ron Paul 2012, end of story.
Kudos to ColinFromLasVegas. You hit the nail on the head!
Boy am i glad i never signed for a house in Vegas..
That is an excellent point. The housing crisis is pretty much the underlying cause of the dragging economy, but there isn't much they can do about it.
Americans built up a bubble on hysterics and real estate overpricing. Probably not much is going to change in the economy until consumers chew and digest the racked up debt. That is tougher and tougher to do as jobs are outsourced and household home income is declining. Corporations are hording all the cash right now.
One would have to be brain-dead to not know the Repubicans are only interested in what benefits they can receive from big business and to hell with the common working man.
A conspriratorial approach to dealing with working class problem solving is to avoid the issues altogether.
Remember, they were elected to Suppress the American Dream.
Treason is their calling card.
2 yrs. ago and 3 yrs. ago I posted [several times in fact] and I posted it again this a.m. which the Sun didn't see fit to print..anyway.
If we really wanted to get out of the housing 'crisis' uncle sugar could...
Prop up any bank who agreed to..
Allow the underwater homeowner [or any home owner] to repay their mortgage without interest except for a 1% loan management fee with the 1% being a fixed %age of the initial loan for the life of the loan i.e. a 200,000 dollar loan would require the borrower to repay a 2,000 dollar 'loan management' fee for the life of the loan.
Thus a 200,000 dollar 20 year loan would require a monthly repayment of 833.00 + the 'loan management fee of 167.00 which would make a monthly payement of 1,000 dollars which is approx. equal to an apt.rental unit in LV.
In 20 yrs. the bank would recoup 240,000 dollars for the house that they are repossessing today and reselling for approx. 100,000 bucks.
Uncle sam could treat any mortgage that functioned under this repayment plan as a CAPITOL GAINS investment with taxes collected on it when the house is sold or the owner takes out a equity loan except for educational loans or medical bills.
My home is payed off so I'm not suggesting this idea to 'feather' my nest.
Why would the talk about foreclosures? It is personal business problem why would government be involved? Obama wants top spend money "helping" people who do not want to spend their own money on there home. What about the people who never got a refi? What about the people who paid cash? What about the people who pay their mortgage as they agreed? None of these people get any help, why should the government pick and choose who they want to help out? Let the chips fall, everyone is in the game. I bought several properties last year and I did not get the $8000 tax credit but my neighbor did. Why is that? What make him so special? I did not get cash for my old car but my neighbor did.
The Republicans have it right, stay out of peoples' business!
Right on Peter! No one helped me recoup the $80,000 CASH equity I lost when I sold my house. I can't get a job because companies are hiring people who are on certain programs so that they can get government subsidies. What really pisses me off is that most of the people receiving government help hate the U.S. government and have never served the U.S. Government. ALL they do is take, take, take! Finally, nothing happens with the housing market until there are jobs!!!!
Republicans HAVE been talking about the housing crisis and blaming it on gays, Mexicans, muslims, liberals, labor unions, Obama, pro-choice, gun control, pollution control and environmentalism. The Republican platform is once we execute/jail/deport/liquidate/torture the gays, Mexicans, muslims, liberals, feminists and once we crush the labor unions and once we ban abortion and once we eliminate all pollution control, gun control and environmental laws, THEN the housing crisis, and all other crises, will be resolved.
Yours in Christ,
Rob Whitetrash - Pahrump Deluxe Trailer Park
Hey Peter - maybe you didn't get any tax deductions because you don't know the difference between there, their, and they're. As usual you're out in left field. The federal tax credit was for first time home buyers not clowns with a glut of cash who are making money on the misfortunes of others. Oh and there were few restrictions on the Cash for Clunkers program. However, your idea of an "old car" is probably a 2009 Mercedes Benz.
And the housing crisis isn't just about people who refinanced their homes. It's very much about market speculators and opportunists who crashed the housing market and now people are stuck with homes that will probably never recover their value. Being upsidedown in your mortgage because Wall Street gambled with everyone's (including yours) mortgage has nothing to do with people being irresponsible.
I love how these people try to pretend that all of the country's problems can be blamed on a minority of financially irresponsible people and then gripe about everything the government does to try and help everyone else. I think we know who here is for not paying their fair share of taxes. I'd bet that someone who posted here is one of those "landlords" that buy up houses for dirt cheap, rent out every room to whoever has a pulse and then makes them pay cash each month so they don't have to claim it in income. Then they sit here and complain about Obama and how the government is full of crooks.
Republican greed caused this mess.
These fools are the last people on earth to fix
it.
And 9-9-9 sucks.
These greedy republicans protect the rich.
We can't let these republican liars, thieves
and crooks fool Americans again.
REPUBLICANS HAVE DONE ENOUGH DAMAGE TO OUR
COUNTRY.
VOTE ALL GREEDY REPUBLICANS OUT OF OFFICE.
The Republicans haven't talked about foreclosures because there's no money coming from that part of their consituentcy.
Instead they talk about defunding and dismanteling the EPA,about erasing the line between church and state,about overturning Roe v Wade,about busting unions and undoing banking reforms that were made in an effort to prevent another economic meltdown.
They talk about doing those things because THATS where the money is coming from ,and these candidates have either been won at auction or soon will be won at auction, and they are/will be expected to pay dividends whether or not it's whats best for the country.
"Why would the [sic] talk about foreclosures? It is personal business problem why would government be involved?"
petef -- because the root cause of the problem is the banks, the biggest being national banking associations chartered under the National Bank Act of 1864. Their federal regulator is the OCC, you'll find the link in my 11:39a post. Being corporations they are creatures of the laws creating them. If you buy your home on a note with a private individual, only then is it a "personal business problem."
"The note is the cow and the mortgage the tail. The cow can survive without the tail, but the tail cannot survive without the cow." -- the late Professor Chester Smith of the University of Arizona College of Law, as cited in Restatement (Third) of Property, Mortgages 5.4, Reporters' Notes
Police this Autumn, National Guard next Spring and the US Army next Fall. This is a Democracy in action!
Those that can't afford $500/hr lobbyists who show up at the Capital around 11pm to push through last minute legislation for specialized tax breaks can only barter with the ultimate currency: their soles!
Get ready for the ultimate solution....
As a board of director, Rahm Emanual made a a few bucks 'overseeing' Fannie&Freddie Mac. This was during the time when they 'cooked the books' so that they would meet their numbers and collect bonuses. It is amazing that no one has gone to jail nor has there been any reform (Frank&Dodd must have forgot). The taxpayers are on the hook for 180 billion and counting.
Whenever a republican mentioned reform in the past decade the Dims cried racism.