Sunday, Oct. 30, 2011 | 2 a.m.
Former Massachusetts Gov. Mitt Romney got in trouble recently when he came to Nevada and started talking about housing. Nevada has the highest foreclosure rate in the country, and Romney, a front-runner for the Republican presidential nomination, showed little sense of compassion or desire to help ease the foreclosure crisis.
In an interview with the Las Vegas Sun, Romney said “the key thing for me is let the market do its work. Get the foreclosures washed through the system ... let the market rebound from the bottom that it hits, and get people back into homes.”
In other words, Romney doesn’t want the government involved but instead wants the market left on its own. And he wants it to move quickly by having foreclosures “washed through the system,” meaning even more foreclosures.
Romney is not alone proposing a hands-off approach to the foreclosure crisis. Arguing to let the market “do its work” has become something of a conservative mantra. Nearly all of the Republican presidential candidates have said similar things.
Conservatives are loath to talk about any type of government help or intervention. They have offered a number of economic explanations about how letting the market work supposedly makes sense, but does anyone see a problem with leaving the market on its own to correct itself? After all, it was the market — fueled by lax oversight — that got the country into this mess with its risky practices. The result is that millions of Americans have faced job loss and foreclosure.
And the idea that foreclosures need to be “washed through the system” quickly is ludicrous. Did the Republican presidential candidates fail to notice what happened as the banks scrambled to foreclose on properties? There were serious problems. In Nevada, for example, state Attorney General Catherine Cortez Masto has alleged that one major bank essentially railroaded homeowners, ignoring its own procedures to foreclose on properties when it didn’t have the right to do so.
What makes the Republican presidential candidates’ advocacy of a hands-off approach even more troubling is that it leaves consumers with nowhere to turn. Wall Street made billions in profits by breaking and bending the rules, and Americans are paying the price. It is galling that the Republican approach would only further this injustice. This is the time government should be involved.
Nevadans understand how devastating the situation is. In addition to the highest rate of foreclosure, the state also has the highest rate of unemployment.
President Barack Obama was in Las Vegas last week to unveil his plan to help ease the foreclosure crisis. The plan will allow people who owe more than their home is worth, or who have a small amount of equity, to refinance. To qualify, the mortgages have to be owned or backed by Fannie Mae or Freddie Mac, and homeowners have to be current with their loans and have a strong record of making payments on time.
Estimates say as many as 2 million homes could qualify, and critics have tried to dismiss the plan, saying it won’t help much, if at all. The plan certainly isn’t perfect, but it’s at least a step in the right direction — and it’s more than anyone else has offered.