The Romney campaign is finally speaking out about its initiatives to solve the housing crisis, after being pretty mum on the topic in the early stages of the 2012 presidential campaign.
Reducing the role of government, ending “too-big-to-fail,” reforming Freddie Mac and Fannie Mae and making foreclosure alternatives easier are among the initiatives laid out in the “Romney-Ryan Plan to End the Housing Crisis,” released by the campaign this week. Additionally, the platform attacks the Dodd-Frank Act including work by the current administration to introduce new fair lending practices Romney’s camp say burden small business and inhibit housing growth.
Selling 200,000 vacant homes currently owned by the government is one step, the plan states, that will eliminate more than half of the foreclosed homes that are bringing neighborhoods down.
Another step: make foreclosure alternatives easier including short sales, deed-in-lieu of foreclosure and shared appreciation. This comes along with replacing the Dodd-Frank Act with “sensible” regulation in a “new era of responsible lending….to allow banks to approve loans to families with good credit rather than rejecting their applications for mortgages.
The statement digs at the current administration’s housing programs as “failures,” noting the homeownership is well beyond the reach of most Americans.
“Despite an alphabet soup of federal housing assistance programs and an unprecedented period of record low mortgage rates, the current “recovery” means that housing’s contribution to GDP is only half of what it has been historically,” the platform states. “Unfortunately, the failed policies of the Obama Administration have put the dream of homeownership needlessly out of reach. In many cases, the President’s policies have made things worse.”
Further, the plan says, the regulatory burden has fallen disproportionately upon small banks, noting the recent revamping of mortgage disclosures implemented by the Consumer Financial Protection Bureau as well as the development of the Qualified Mortgage Rule.
“… regulations are not without costs and the burden falls disproportionately on smaller banks that don’t have the same level of resources as large banks,” the plan states. “The consequence is that they are forced to use more of their resources hiring lawyers rather than lending to consumers and small businesses, or approving new mortgages. In one new mortgage rule, 1,100 pages of guidelines were issued by regulators for the purpose of developing a simplified three-page mortgage form. This regulatory burden is significant enough that there are even some cases where small banks have more compliance officers than loan officers.”
Additionally, the plan includes reforming Fannie Mae and Freddie Mac to decrease the role of government in the housing market and reintroduce more private market growth.
“Housing is a vital part of the American economy and it has played an instrumental role in leading the country out of past recessions,” the plan reads. “The Romney-Ryan plan will reduce the outsized role of the government and revitalize the private sector’s role in the housing market to end the housing crisis and preserve the American Dream of homeownership.”
View the Romney-Ryan housing plan.
Written by Elizabeth Ecker