Republican presidential candidate Mitt Romney has a lot riding on convincing the voters in the pivotal swing state of Florida that the foreclosure crisis there is deepening and that lending is virtually frozen, as at least one new political ad states.
The problem is that the assertions made by the GOP are either misleading, wrong and or just downright baffling.
The oddest reference is to some type of “lending freeze” occurring in Florida, which Romney will supposedly begin to thaw.
Romney’s primary solution thus far to the slow-to-recover housing crisis is to come up with “alternatives to foreclosures,” but he does not offer details.
The Obama Administration has tried every possible alternative to preventing homeowners from falling into foreclosures with mixed results. This year, government programs have been expanded to allow more “underwater” mortgage holders to refinance at today’s historically low mortgage rates.
In addition, U.S. officials, banking regulators and several state attorneys general are forcing the top lenders to re-negotiate with borrowers to lower monthy payments and in some cases to write down mortgage principals to prevent the foreclosure crisis from re-deepening.
Nearly 4 million foreclosed-on homeowners who were victims of lender or mortgage-servicer neglect or abuses are being assisted through the $25 billion mortgage settlement or the so-called Independent Foreclosure Review conducted by banking regulators.
So what alternatives to foreclosures is Romney considering? He hasn’t said.
A new Romney Florida TV spot takes aim at the state’s still-hurting housing market, promising “alternatives” to foreclosures and to “end the mortgage lending freeze.”
In 30 seconds, there are no details on how that would happen. And no explaining as to what the ad means by a “mortgage lending freeze.”
Each lender formulates its own mortgage standards and must adhere to regulator guidelines while maintaining responsible practices to bolster businesses and communities through commercial loans and residential mortgages.
While lending standards have obviously tightened since the financial crisis, there is no such thing as a lending freeze.
In the ad, Romney blames Obama for falling home prices and for the 8.5 homeowners nationwide receiving foreclosure notices. He also blames Obama for 11 million homeowners being underwater on their mortgages.
The ad cites RealtyTrac.com as a source.
But RealtyTrac Staff Writer Joel Cone has this to say in response:
“That figure roughly aligns to data compiled by RealtyTrac, which shows that since the housing crisis began in 2007 through July 2012, the 8.5 million homeowners started the foreclosure process — with 3 million of those foreclosure starts coming in 2007 and 2008, before Obama took office. Roughly half of those homeowners that have started the foreclosure process — 4.4 million — have made it all the way through the foreclosure process and lost their homes to the lenders as bank repossessions (REOs).”
Obama himself has drawn plenty of blame for not cracking down sooner and harder on lenders for failing to follow through on mortgage modifications and for committing the ultimate insult to foreclosure victims in the form of “dual tracking,” the practice of foreclosing even as borrowers are negotiating loan modifications.
“Maybe with distressed homeowners protesting outside the doors of the Democratic convention, President Obama will issue a statement of his own addressing how he plans to turn around the housing crisis,” Cone writes. “Hopefully, one at least that offers more solutions and less blame on the other party.”
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